Louisiana Encouraged To Apply For SBA Working Capital Loan

As Louisiana continues to grapple with the aftermath of drought conditions, the Small Business Administration (SBA) has extended a lifeline to small nonfarm businesses across 33 parishes in Louisiana, as well as neighboring counties in Mississippi and Texas. With the looming May 6, 2024 deadline, the SBA's Office of Disaster Recovery and Resilience urges eligible businesses to apply for federal disaster loans designed to mitigate economic losses incurred due to the drought.

The economic impact of reduced revenues stemming from the drought, which began on August 29, 2023, has been significant for many businesses. In response, the SBA offers low-interest loans to help offset these losses and support businesses in maintaining their operations.

While the deadline for the initial declaration is approaching, small businesses can still access assistance through a separate declaration (LA 20232). This declaration specifically targets businesses affected by the severe or extreme drought that occurred between September 19 and December 5, 2023. Notably, this includes businesses engaged in aquaculture, such as those reliant on the crawfish season, providing much-needed relief to sectors deeply impacted by the adverse conditions.

The scope of assistance extends to all 64 parishes in Louisiana, as well as select counties in Arkansas, Mississippi, and Texas. Eligible entities, including small nonfarm businesses, agricultural cooperatives, businesses engaged in aquaculture, and private nonprofit organizations of any size, can apply for Economic Injury Disaster Loans of up to $2 million. These loans are intended to address working capital needs, covering expenses such as fixed debts, payroll, and accounts payable that have been affected by the disaster's impact.

Clarifying the eligibility criteria, SBA Regional Administrator Sánchez emphasizes that economic injury assistance is available to businesses dependent on farmers and ranchers experiencing agricultural production losses, as well as those directly impacted by the disaster, regardless of property damage. This inclusive approach aims to support a diverse range of businesses, acknowledging the interconnectedness of economic activities within the affected regions.

Small businesses are encouraged to seize this opportunity for financial relief by submitting their applications before the deadline. The SBA stands ready to assist and guide applicants through the process, ensuring that businesses can access the resources needed to navigate these challenging times and emerge resilient.

Low-Interest Disaster Loans Available for Businesses and Nonprofit In times of crisis, financial support becomes crucial for businesses and nonprofit organizations to recover and rebuild. The Small Business Administration (SBA) offers low-interest disaster loans to assist in such situations. Recently, on September 6, 2023, the U.S. Secretary of Agriculture declared an agricultural disaster, triggering the availability of Economic Injury Disaster Loans (EIDL) through the SBA.

These loans come with attractive terms, featuring an interest rate of 4 percent for businesses and 2.375 percent for private nonprofit organizations. The repayment terms extend up to 30 years, with loan amounts and terms tailored to fit each applicant's financial circumstances.

One notable advantage is that interest does not start accruing until 12 months from the date of the initial loan disbursement. This provides borrowers with a grace period to stabilize their operations before beginning repayment, which commences 12 months from the first disbursement.

However, it's essential to note that businesses primarily engaged in farming or ranching are not eligible for SBA disaster assistance. Instead, they are directed to seek assistance from the Farm Services Agency under the U.S. Department of Agriculture. Nevertheless, nurseries remain eligible for SBA disaster assistance, particularly in drought-related disasters.

Applying for these disaster loans is streamlined, with online applications available on the SBA website at SBA.gov/disaster. Additionally, applicants can obtain further information and guidance by contacting the SBA's Customer Service Center via phone at (800) 659-2955 or email at disastercustomerservice@sba.gov.

Accessibility is prioritized, with telecommunications relay services available for individuals who are deaf, hard of hearing, or have speech disabilities, by dialing 7-1-1.

In times of distress, these low-interest disaster loans serve as a lifeline for businesses and nonprofits, providing the necessary financial support to navigate through challenges and emerge stronger on the other side.