SBA to help entities affected by drought and excessive heat

The U.S. Small Business Administration announced federal economic injury disaster loans are available for regional small businesses, small agricultural cooperatives, small businesses engaged in aquaculture, and most private nonprofit organizations with economic losses from drought and excessive heat that occurred June 1 through July 31.

The declaration includes the primary counties of Sussex, Kent and New Castle in Delaware; and the adjacent counties of Caroline, Cecil, Dorchester, Kent, Queen Anne's, Wicomico and Worcester in Maryland; Cumberland, Gloucester and Salem in New Jersey; and Chester and Delaware in Pennsylvania.

“When farmers face crop losses and a disaster is declared by the secretary of agriculture, SBA working capital loans become a lifeline for eligible small businesses,” said Francisco Sánchez Jr., associate administrator for the Office of Disaster Recovery and Resilience at the Small Business Administration. “These loans are the backbone that helps rural communities bounce back and thrive after a disaster strikes.”

Under this declaration, the SBA’s Economic Injury Disaster Loan program is available to eligible farm-related and non-farm-related entities that suffered financial losses as a direct result of this disaster. Apart from aquaculture enterprises, SBA cannot provide disaster loans to agricultural producers, farmers and ranchers. Nurseries are eligible to apply for economic injury disaster loans for losses caused by drought conditions.

The loan amount can be up to $2 million, with interest rates of 4% for small businesses and 3.25% for private nonprofit organizations, and terms up to 30 years. Interest does not accrue, and payments are not due, until 12 months from the date of the first loan disbursement.

The SBA sets loan amounts and terms based on each applicant’s financial condition. Eligibility is based on the size of the applicant entity, type of activity and its financial resources. These working capital loans may be used to pay fixed debts, payroll, accounts payable and other bills that could have been paid had the disaster not occurred. The loans are not intended to replace lost sales or profits.

For more information, go to SBA.gov/disaster.  The deadline to apply is Tuesday, May 27.