SBA Disaster Loans Available for Texas Small Businesses Affected by Drought

Small nonfarm businesses in seven Texas counties are now eligible to apply for low-interest federal disaster loans from the U.S. Small Business Administration (SBA). Francisco Sánchez Jr., associate administrator for the Office of Disaster Recovery and Resilience at the SBA, announced that these loans are intended to offset economic losses due to reduced revenues caused by the drought, which began on April 16.
The primary affected county is Zavala, with neighboring counties, including Dimmit, Frio, Kinney, Maverick, Medina, and Uvalde, also eligible.

“SBA eligibility covers both the economic impacts on businesses dependent on farmers and ranchers that have suffered agricultural production losses caused by the disaster and businesses directly impacted by the disaster,” Sánchez said.

Small nonfarm businesses, small agricultural cooperatives, small businesses engaged in aquaculture, and most private nonprofit organizations of any size may qualify for Economic Injury Disaster Loans of up to $2 million. These loans help meet financial obligations and operating expenses that could have been met had the disaster not occurred.

“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 percent for businesses and 3.25 percent for private nonprofit organizations, a maximum term of 30 years, and are available to small businesses and most private nonprofits that cannot offset the adverse impact without hardship,” Sánchez added.

Interest on these loans does not begin to accrue until 12 months from the date of the initial disbursement, with repayment starting 12 months after the first disbursement.

By law, the SBA offers Economic Injury Disaster Loans when the U.S. Secretary of Agriculture designates an agricultural disaster. This disaster was declared on June 17.

While businesses primarily engaged in farming or ranching are not eligible for SBA disaster assistance, agricultural enterprises should contact the Farm Services Agency for U.S. Department of Agriculture assistance. However, nurseries are eligible for SBA disaster assistance in drought situations.

Applicants can apply online and receive additional information at For more assistance, applicants can also call SBA’s Customer Service Center at (800) 659-2955 or email Dialing 7-1-1 provides access to telecommunications relay services for individuals who are deaf, hard of hearing, or have a speech disability.

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Michael Guta Michael Guta is the Assistant Editor at Small Business Trends and has been with the team for 9 years. He currently manages its East African editorial team. Michael brings with him many years of content experience in the digital ecosystem covering a wide range of industries. He holds a B.S. in Information Communication Technology, with an emphasis in Technology Management.