Francisco Sánchez Jr., the associate administrator for the Office of Disaster Recovery and Resilience at the Small Business Administration (SBA), has reminded small nonfarm businesses across several states of the impending deadline to apply for federal disaster loans. These vital funds are designed to help businesses counter the economic strain caused by severe drought conditions that have plagued various regions since mid-2023.
The SBA’s low-interest Economic Injury Disaster Loans (EIDL) are available to small nonfarm businesses, small agricultural cooperatives, small businesses engaged in aquaculture, and most private nonprofit organizations. These loans aim to provide up to $2 million in working capital to alleviate the financial hardships brought on by reduced revenues due to the drought. The deadline for application submission is April 1, 2024, marking a critical juncture for businesses in need.
The affected areas span across 20 Iowa counties and neighboring counties in Illinois, Minnesota, Missouri, and South Dakota, with primary counties including Cass, Lee, Lyon, and Montgomery in Iowa. Similarly, 10 Missouri counties, notably Grundy and Livingston, and their neighboring regions are eligible for assistance. Montana’s primary counties, Flathead and Lincoln, along with neighboring areas in Montana and Idaho, are also included.
Sánchez emphasized that the EIDLs could be used to cover essential operational costs, such as fixed debts, payroll, and accounts payable, which have become challenging to manage due to the drought’s impact. This assistance extends to businesses indirectly affected by the disaster, such as those reliant on the agricultural sector, highlighting the SBA’s comprehensive approach to disaster recovery.
The loans feature an interest rate of 4 percent for businesses and 2.375 percent for private nonprofit organizations, with repayment terms of up to 30 years. The SBA will determine the loan amounts and terms based on each applicant’s financial condition, ensuring tailored support to meet diverse needs.
It’s crucial for small business owners to recognize that these loans are a direct result of the U.S. Secretary of Agriculture’s agricultural disaster designation, underscoring the government’s recognition of the severe economic fallout from the drought. Notably, businesses primarily engaged in farming or ranching are directed to seek assistance from the Farm Services Agency, with an exception made for nurseries, which qualify for SBA assistance in drought disasters.
Applicants are encouraged to apply online at SBA.gov/disaster and can seek further assistance through the SBA’s Customer Service Center. The center offers guidance on the application process and additional disaster assistance information, ensuring that affected businesses have the support they need to navigate this challenging period.
As the deadline approaches, small business owners in the affected regions must act swiftly to secure the financial assistance necessary for their survival and continued operation. The SBA’s disaster loan program represents a critical lifeline, offering hope and practical support to those facing the economic repercussions of the drought.
Image: SBA
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