SBA Announces Federal Disaster Loans For Small Businesses
By: Stephen Crews
Updated: February 22, 2011
The U.S. Small Business Administration announces today that federal economic injury disaster loans are available to small businesses, small agricultural cooperatives, small businesses engaged in aquaculture and most private non-profit organizations of all sizes located in Jackson, Lauderdale, Limestone and Madison counties in Alabama as a result of drought and excessive heat that began on June 1, 2010.
“These counties are eligible because they are contiguous to one or more primary counties in Tennessee. The Small Business Administration recognizes that disasters do not usually stop at county or state lines. For that reason, counties adjacent to primary counties named in the declaration are included,” said Frank Skaggs, director of SBA’s Field Operations Center East in Atlanta.
“When the Secretary of Agriculture issues a disaster declaration to help farmers recover from damages and losses to crops, the Small Business Administration issues a declaration to assist eligible entities affected by the same disaster,” said Skaggs.
Under this declaration, the SBA’s Economic Injury Disaster Loan (EIDL) program is available to eligible farm-related and nonfarm-related entities that suffered financial losses as a direct result of the disaster. Farmers, ranchers and agricultural producers are not eligible to apply to SBA, but nurseries are eligible to apply for EIDLs for losses caused by drought conditions.
Loan amounts can be up to $2 million, with interest rates of 3 percent for non-profit organizations and 4 percent for small businesses. Terms can be up to 30 years. The SBA determines eligibility based on the size of the applicant, type of activity and its financial resources. The agency sets loan amounts and terms based on each applicant’s financial condition. These working capital loans may be used to pay fixed debts, payroll, accounts payable, and other bills that could have been paid had the disaster not occurred. The loans are not intended to replace lost sales or profits.
To obtain information on the SBA’s Disaster Loan Program, application forms or to apply online visit www.sba.gov, call the SBA’s Customer Service Center at 800-659-2955 (800-877-8339 for people with speech and hearing disabilities) Monday through Friday from 8 a.m. to 6 p.m. ET or send an e-mail to disastercustomerservice@sba.gov.
Completed loan applications must be returned to SBA no later than October 17, 2011.
