SBA offers loans for drought recovery

By Scout Nelson

Small nonfarm businesses in Bowman County, North Dakota, along with neighboring counties in Montana and South Dakota, can now apply for low-interest federal disaster loans from the U.S. Small Business Administration (SBA). This announcement was made by Francisco Sánchez Jr., the associate administrator for the Office of Disaster Recovery and Resilience at the SBA. These loans aim to help businesses recover from economic losses due to reduced revenues resulting from drought, which was declared a disaster beginning August 6.

The affected counties include Bowman, Adams, and Slope in North Dakota; Fallon in Montana; and Harding in South Dakota. When farmers experience crop losses and the Secretary of Agriculture declares a disaster, SBA working capital loans become vital for eligible small businesses. Sánchez stated, “These loans are the backbone that helps rural communities bounce back and thrive after a disaster strikes.”

Eligibility for these loans includes businesses that depend on agriculture and those directly impacted by the drought. Small nonfarm businesses, small agricultural cooperatives, aquaculture businesses, and most private nonprofit organizations may qualify for Economic Injury Disaster Loans of up to $2 million. These funds can assist in meeting financial obligations and operating expenses.

“It’s important to note that eligibility is based solely on the financial impact of the disaster, not on actual property damage,” Sánchez added. The loans have a 4% interest rate for businesses and 3.25% for private nonprofits, with terms up to 30 years. Interest does not accrue until 12 months after the initial loan disbursement.

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