Small nonfarm businesses in select counties of Iowa and South Dakota are now eligible to apply for low-interest federal disaster loans from the U.S. Small Business Administration (SBA), according to an announcement by Director Tanya N. Garfield of SBA’s Disaster Field Operations Center-West. This initiative aims to counterbalance the economic losses incurred due to reduced revenues as a result of drought beginning April 1.
The affected regions include Plymouth, the primary county in Iowa, neighboring counties of Cherokee, O’Brien, Sioux, and Woodbury in Iowa, and Union county in South Dakota.
The loan program addresses the economic effects on businesses dependent on farmers and ranchers who have experienced agricultural production losses due to the drought. Additionally, it includes businesses directly impacted by the disaster.
Businesses eligible for the Economic Injury Disaster Loans include small nonfarm businesses, small agricultural cooperatives, small enterprises engaged in aquaculture, and most private nonprofit organizations. These entities may qualify for loans up to $2 million, designed to help them meet financial obligations and operating expenses which could have been met had the drought not occurred.
The loans have an interest rate of 4 percent for businesses and 2.375 percent for private nonprofit organizations, a maximum term of 30 years, and are available to small businesses and most private nonprofits without the financial means to mitigate the adverse impact without hardship.
The SBA is legally authorized to offer Economic Injury Disaster Loans when the U.S. Secretary of Agriculture declares an agricultural disaster. The Secretary declared this disaster on May 30.
It is crucial to note that businesses primarily engaged in farming or ranching are not eligible for SBA disaster assistance. Instead, agricultural enterprises are advised to contact the Farm Services Agency regarding the U.S. Department of Agriculture assistance made available by the Secretary’s declaration. Interestingly, nurseries are eligible for SBA disaster assistance in drought disasters.
Small businesses and nonprofits in the designated areas can apply online and download applications at the official SBA Disaster Loan Assistance website.
The deadline to apply for the economic injury loans is set for January 30, 2024.
This article, “SBA Opens Economic Injury Disaster Loans for Iowa Small Businesses Affected by Drought” was first published on Small Business Trends