NEW YORK (AP) -- Small businesses located in parts of the South, Midwest and West that have been declared disaster areas because of this year's drought are eligible for disaster relief loans from the Small Business Administration.
Agriculture Secretary Tom Vilsack declared parts of 29 states disaster areas earlier this month because of the excessive heat and lack of rain that is hurting crops. That allows farmers to get low-interest loans.
The SBA loans are intended to help small companies, small agricultural cooperatives and nonprofit organizations that rely on farmers or ranchers for their sales. These loans, known as economic injury disaster loans, are made to companies that haven't suffered physical damage in a disaster, but that stand to lose money because their customers -- in this case, farmers and ranchers -- are buying fewer goods and services.
The SBA has taken similar steps in response to past disasters. For example, after the oil spill in the Gulf of Mexico in 2010, companies that supplied the fishing industry were among those able to get economic injury disaster loans.
The SBA loans have an interest rate of 4 percent for businesses, and 3 percent for nonprofits. Companies that are interested in applying for a loan should visit https://disasterloan.sba.gov/ela
Farmers and ranchers are not eligible for the loans; they should visit www.usda.gov to find out what help is available for them.
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