Small Business Finance News
SBA Assistance For Drought Stricken Small Businesses
Written by Tim Morral
Small Business Administration announces disaster assistance for small businesses in Arkansas and five neighboring states that have been severely impacted by heat or drought.
While the media warns consumers about the drought's effect on food prices, this summer's heat wave is set to have a devastating impact on the small business community, especially in the driest regions of the nation.
The Small Business Administration (SBA) has announced disaster assistance for nonfarm small businesses in 70 Arkansas counties as well as businesses located in neighboring counties or parishes in Louisiana, Mississippi, Oklahoma, Tennessee and Texas. The SBA's assistance package will primarily consist of low-interest federal disaster loans. Unlike SBA 504 loans, these loans have been created to meet the needs of businesses that have been affected by disaster.
According to Alfred E. Judd, Director of SBA's Disaster Field Operations Center -- West, "These loans offset economic losses because of reduced revenues caused by drought and excessive heat that occurred in the following primary Arkansas counties."
Classified as Economic Injury Disaster Loans (EIDLs), these loans can be secured in amounts up to $2 million for operating expenses or financial hardships that can be directly connected to the drought. Qualifying organizations include small nonfarm businesses, small agricultural cooperatives, small aquaculture businesses and most nonprofit organizations. The SBA initiated the current EIDL following the designation of an agricultural disaster by U.S. Secretary of Agriculture Tom Vilsack.
"Eligibility for these loans is based on the financial impact of the disaster only and not on any actual property damage. These loans have an interest rate of 4% for businesses and 3% for private, nonprofit organizations, a maximum term of 30 years, and are available to small businesses and most private, nonprofits without the financial ability to offset the adverse impact without hardship," Judd said.
Farms and ranches do not qualify for SBA EIDLs. Instead, agricultural businesses should contact the Farm Services Agency (FSA) to inquire about USDA assistance that was made available with Secretary Vilsack's announcement.
For more information about the EIDL program, visit the SBA website.
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