Deadline Approaching in Iowa for SBA Working Capital Loans Due to Drought

Francisco Sánchez Jr., associate administrator for the Office of Disaster Recovery and Resilience at the Small Business Administration, today reminded small nonfarm businesses in 17 Iowa counties of the April 29, 2024, deadline to apply for an SBA federal disaster loan for economic injury. These low-interest loans are to offset economic losses because of reduced revenues caused by drought in the following primary counties that began Aug. 22, 2023.

Primary counties: Black Hawk, Bremer, Butler, Chickasaw, Floyd and Grundy; Neighboring counties: Benton, Buchanan, Cerro Gordo, Fayette, Franklin, Hardin, Howard, Marshall, Mitchell, Tama and Winneshiek.

According to Sánchez, 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. “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 percent for businesses and 2.375 percent 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 Aug. 28, 2023.

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