Drought Continues, Federal Disaster Loans Available

April 30, 2012

Spring is off to a dry start as farmers plant their crops, and time is running out to apply for federal economic injury disaster loans available in Florida as a result last year’s drought.

The latest U.S. Drought Monitor map shows the area in a moderate to severe drought — a drought that has persisted about a year. Most of Escambia County in Florida is in a moderate drought, while the northern area of Santa Rosa County is in a severe drought.

Last year, Escambia and Santa Rosa counties were declared federal disaster areas due to the combined effect of excessive drought and the summer’s high temperatures. Many farmers lost a large percentage of their crops to the dry soils.

Small businesses, small agricultural cooperatives, small businesses engaged in aquaculture and most private non-profit organizations of all sizes have a May 21 deadline to apply for federal disaster loans related to the 2011 drought.  While the federal disaster area was southern Alabama, the loans are also available in Florida counties including Escambia and Santa Rosa.

“These counties are eligible because they are contiguous to one or more primary counties in Alabama. The Small Business Administration recognizes that disasters do not usually stop at county or state lines. For that reason, counties adjacent to primary counties named in the declaration are included,” said Frank Skaggs, director of SBA’s Field Operations Center East in Atlanta.

“When the Secretary of Agriculture issues a disaster declaration to help farmers recover from damages and losses to crops, the Small Business Administration issues a declaration to eligible entities affected by the same disaster,” Skaggs added.

Under this declaration, the SBA’s Economic Injury Disaster Loan program is available to eligible farm-related and nonfarm-related entities that suffered financial losses as a direct result of this disaster. With the exception of aquaculture enterprises, SBA cannot provide disaster loans to agricultural producers, farmers, or ranchers, but nurseries are eligible to apply for economic injury disaster loans for losses caused by drought conditions.

About the Disaster Loans

The loan amount can be up to $2 million with a 4 percent interest rate for eligible small businesses and 3 percent for non-profit organizations with terms up to 30 years. The SBA determines eligibility based on the size of the applicant, type of activity and its financial resources. Loan amounts and terms are set by the SBA and are based on each applicant’s financial condition. These working capital loans may be used to pay fixed debts, payroll, accounts payable, and other bills that could have been paid had the disaster not occurred. The loans are not intended to replace lost sales or profits.

Disaster loan information and application forms may be obtained by calling the SBA’s Customer Service Center at 800-659-2955 (800-877-8339 for the deaf and hard-of-hearing) or by sending an email to disastercustomerservice@sba.gov. Loan applications can be downloaded from the SBA’s website at www.sba.gov . Completed applications should be mailed to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.

Pictured top: Many area farmers have turned to late afternoon and overnight irrigation on growing crops, like this corn field being irrigated at sunset in Walnut Hill. NorthEscambia.com photo, click to enlarge.

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Written by William Reynolds · Filed Under News