Small businesses eligible for SBA drought loans

Small, nonfarm businesses in 43 Colorado counties, including El Paso and Teller counties, are eligible to apply for low-interest federal disaster loans from the U. S. Small Business Administration.

“These loans offset economic losses because of reduced revenues caused by the drought that began on Nov. 1, 2012, in the following primary counties,” said Alfred E. Judd, director of SBA’s Disaster Field Operations Center-West.

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 up to $2 million to help meet financial obligations and operating expenses which could have been met had the disaster not occurred.

Businesses primarily engaged in farming or ranching are not eligible for SBA disaster assistance.

“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,” Judd said.

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 percent 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.

By law, SBA makes EIDLs available when the U. S. Secretary of Agriculture designates an agricultural disaster.  Secretary Tom Vilsack declared this disaster Jan. 9, 2013.

Applicants can apply online using the Electronic Loan Application on SBA’s secure web site or call  (800) 659-2955. The deadline to apply for these loans is Sept. 9, 2013.