Drought Relief Loans Through SBA

Small businesses in drought-stricken areas may qualify for federal disaster loans of up to $1.5 million through the U.S. Small Business Administration (SBA).

These loans are available at a 4 percent interest rate with loan terms up to 30 years. The applicant business must be located in a declared disaster area and the economic injury must have been the direct result of the declared disaster.

By law, agricultural enterprises, such as farmers and ranchers are not eligible for any type of SBA assistance. But nurseries are eligible for economic injury caused by declared drought disasters.

"When the Secretary of Agriculture issues a disaster declaration to help farmers recover from damages and losses to crops, SBA issues a declaration to assist small businesses affected by the same disaster," explains Frank Skaggs, director of SBA Field Operations Center East.

In addition to nurseries and landscapers, the assistance is targeting car washes, marinas, restaurants, motels, pool companies, produce packers and other non-farm small businesses.

States with declared disaster areas include: Alabama, Delaware, Florida, Georgia, Kentucky, Maryland, Minnesota, Missouri, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Virginia, West Virginia and Wisconsin.

Drought declarations are by county. Check to see if your county is affected at www.sba.gov/services/disasterassistance

Application filing deadline also varies with dates ranging from Jan. 29, 2008 for Florida, which has been in a drought since March 1, 2006, to June 30, 2008 for Missouri, New Jersey and New York.

Loan amounts and terms are set by SBA and are based upon each applicant’s financial condition. Applications can be obtained by calling SBA’s customer service center at 800-659-2955 from 8 a.m. to 9 p.m. Monday through Friday (EDT) and 9 a.m. to 5:30 p.m. Saturday (EDT). You can also download the form at www.sba.gov/services/disasterassistance.