Small businesses and nonprofits in 57 Missouri counties can now apply for low-interest federal disaster loans from the U.S. Small Business Administration through the Office of Disaster Recovery.
The offer comes after the U.S. Secretary of Agriculture declared the drought in the Midwest an agricultural disaster on March 25. The loans are intended to offset any economic losses for small non-farm businesses that are affected by the drought, according to a news release.
Businesses focused primarily on farming or ranching are not eligible for these loans because the U.S. Department of Agriculture can offer assistance to those businesses instead.
“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,” Francisco Sánchez Jr., associate administrator for the Office of Disaster Recovery, said in the release.
Missouri small businesses can qualify for loans of up to $2 million to help meet financial obligations.
“Eligibility for these loans is based on the financial impact of the disaster only and not on any actual property damage,” Sánchez said. “These loans have an interest rate of 4% for businesses and 3.25% 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.”
Interest does not begin to accrue until 12 months from the date of the initial small business loan. Repayment will begin 12 months after the date of disbursement as well.
“These are very low interest loans with very favorable terms, and we really would like to see businesses not struggle or spend all their reserves and use high credit card debt when they can get this,” Garth MacDonald, public information officer for SBA, said. “You know, these are their tax dollars. They borrow funds from us. They’re not taking money away from anyone else. We have funds to loan for this disaster.”
The deadline to apply for the loans is Nov. 24, 2024.
