Deadline approaching for SBA working capital loans due to drought

Boundary County non farm businesses may be eligible for the Small Business Administration federal disaster loan for economic injury.

Ten Montana counties and neighboring counties in Idaho have until April 1 to apply for an SBA federal disaster loan for economic injury. The low-interest loans are to offset economic losses because of reduced revenues caused by drought in the following primary counties that began June 1, 2023.

Primary Montana counties: Flathead and Lincoln; Neighboring Montana counties: Glacier, Lake, Lewis and Clark, Missoula, Pondera, Powell, Sanders and Teton; Neighboring Idaho counties: Bonner and Boundary.

Small nonfarm businesses, small agricultural cooperatives, small businesses engaged in aquaculture and most private nonprofit organizations of any size may apply for Economic Injury Disaster Loans of up to $2 million to help meet working capital needs caused by the disaster, Francisco Sánchez Jr., associate administrator for the Office of Disaster Recovery and Resilience at the SBA said. 

“Economic Injury Disaster Loans may be used to pay fixed debts, payroll, accounts payable and other bills that cannot be paid because of the disaster’s impact,” said Sánchez.

“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. Economic injury assistance is available regardless of whether the applicant suffered any property damage,” Sánchez added.

The interest rate is 4% for businesses and 2.375% for private nonprofit organizations with terms up to 30 years. Loan amounts and terms are set by SBA and are based on each applicant’s financial condition.

Interest does not begin to accrue until 12 months from the date of the initial disaster loan disbursement. SBA disaster loan repayment begins 12 months from the date of the first disbursement.

By law, SBA makes Economic Injury Disaster Loans available when the U.S. Secretary of Agriculture designates an agricultural disaster. The Secretary declared this disaster on July 31, 2023.

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

Agricultural enterprises should contact the Farm Services Agency about the U.S. Department of Agriculture assistance made available by the Secretary’s declaration. However, nurseries are eligible for SBA disaster assistance in drought disasters.

Applicants may apply online and receive additional disaster assistance information at SBA.gov/disaster. 

Applicants may also call SBA’s Customer Service Center at (800) 659-2955 or email disastercustomerservice@sba.gov for more information on SBA disaster assistance. For people who are deaf, hard of hearing, or have a speech disability, please dial 7-1-1 to access telecommunications relay services.

The U.S. Small Business Administration helps power the American dream of business ownership. As the only go-to resource and voice for small businesses backed by the strength of the federal government, the SBA empowers entrepreneurs and small business owners with the resources and support they need to start, grow, expand their businesses, or recover from a declared disaster. It delivers services through an extensive network of SBA field offices and partnerships with public and private organizations. To learn more, visit www.sba.gov.