Business Loan Glossary: Key Terms Every Small & Medium-Sized Business Should Know
Navigating the world of business loans can be complex, especially for small and medium-sized businesses. Our comprehensive business loan glossary is here to help. Whether you're applying for a loan or managing finances, understanding key terms is crucial to making informed decisions. Explore definitions, explanations, and expert insights to simplify your business loan journey and empower your financial growth.
What is Substantial Damage?
Substantial Damage refers to disaster damages that are uninsured or otherwise uncompensated, meeting specific thresholds for both homes and businesses.
Substantial Damage refers to disaster damages that are uninsured or otherwise uncompensated, meeting specific thresholds for both homes and businesses:
a) For homes:
- 40 percent or more of the home's pre-disaster fair market value (FMV) or replacement cost, including the value of any land, whichever is less; or
- 50 percent or more of the structure's pre-disaster fair market value or replacement cost (excluding the value of any land), whichever is less.
b) For businesses:
- 40 percent or more of the aggregate value (lesser of market value or replacement cost at the time of the disaster) of the damaged real property, including the value of any land, and damaged machinery and equipment; or
- 50 percent or more of the aggregate value (lesser of market value or replacement cost at the time of the disaster) of the damaged real property, excluding the value of any land, and damaged machinery and equipment.
These criteria serve as thresholds to determine the extent of substantial damage incurred by homes and businesses affected by disasters. Meeting these thresholds may qualify individuals and businesses for various forms of disaster assistance and support.