In light of the severe drought that began on June 13, 13 counties in Iowa have been designated eligible to receive low-interest federal disaster loans from the U.S. Small Business Administration (SBA). This announcement comes directly from Director Tanya N. Garfield of the SBA’s Disaster Field Operations Center-West.
The primary counties affected are Crawford, Ida, and Sac. However, neighboring regions like Audubon, Buena Vista, Calhoun, Carroll, Cherokee, Harrison, Monona, Pocahontas, Shelby, and Woodbury are also included in the eligibility list.
Garfield explained the scope of the SBA’s aid, pointing out that it’s meant to cushion the economic shocks both for businesses reliant on farmers and ranchers, who’ve faced agricultural production downturns due to the drought and businesses directly affected by the calamity.
Economic Injury Disaster Loans, catering to several establishments – from small nonfarm businesses, small agricultural cooperatives, and aquaculture businesses to most private nonprofits – offer a financial lifeline to entities rocked by the drought. These loans can provide up to $2 million to support financial obligations and operational costs that would’ve been manageable had the drought not wreaked havoc.
Garfield emphasized that these loans are not tied to physical property damage but solely to the financial disruption caused by the disaster. With an interest rate pegged at 4% for businesses and a reduced 2.375% for private nonprofit organizations, the loan, which can span a maximum term of 30 years, seeks to cater to small businesses and most private nonprofits struggling with the fiscal aftermath of the disaster.
The U.S. Secretary of Agriculture’s responsible for flagging an agricultural disaster, prompting the SBA to roll out the Economic Injury Disaster Loans. This particular disaster was officially declared on August 7.
It should be noted, however, that businesses predominantly involved in farming or ranching aren’t entitled to SBA disaster aid. Instead, they should direct their inquiries to the Farm Services Agency to learn about the U.S. Department of Agriculture’s support mechanisms stemming from the Secretary’s declaration. An exception is made for nurseries, which do qualify for SBA assistance in the face of drought disasters.
Small Business Deals
To apply or gather more information on this disaster relief initiative, businesses can visit the SBA’s online portal at https://disasterloanassistance.sba.gov/.
The window to apply for these economic injury loans will close on April 8, 2024. With these measures in place, the SBA hopes to provide a robust support system for businesses grappling with the dire consequences of the drought.