Rep. Nadler Statement on Economic Injury Disaster Loans Due to Drought
Washington, November 2, 2022
New York, NY - Today, Congressman Jerrold Nadler announced the availability of Small Business Administration (SBA) Economic Injury Disaster Loans (EIDL) for small businesses, small agricultural cooperatives, small businesses engaged in aquaculture, and most private nonprofit organizations with economic losses due to the drought that began on August 9th, 2022. In New York, this disaster declaration includes Brooklyn, Manhattan, and Staten Island.
“I’m pleased to share that this disaster relief is available to eligible entities affected by the severe drought experienced this summer,” said Congressman Nadler. “As the climate crisis leads to more extreme weather events, I’ll keep fighting to mitigate the effects on those most at risk to unpredictable weather patterns.”
Who is eligible to apply for EIDL and what are the terms?
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 (small businesses, small agricultural cooperatives, small businesses engaged in aquaculture, and most private nonprofit organizations), affected by the same disaster in the same disaster area.
When the farmers suffer, both farm related and non-farm related businesses including nonprofit organizations in the agricultural communities may also be economically impacted. For example, when the farmer is unable to plant or harvest due to the drought, the disaster may impact farm implement dealers, crop dusters, feed & seed dealers, packers, and canneries (farm related) and may impact local restaurants, retailers, wholesalers, grocers, etc. (non-farm related businesses).
Nonprofits that may be impacted include but are not limited to thrift stores, bakeries, farm/fruit stands, charitable and social organizations, museums, Associations (Co-ops), Road Associations, Water Associations, etc. If they are unable to collect normal dues or generate sales for typical expenses and the downfall can be attributed to the disaster, they can apply for an Economic Injury Disaster Loan for working capital needs due to the loss experienced because of the drought. Please note religious organizations are not eligible.
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.
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. Apart from aquaculture enterprises, SBA cannot provide disaster loans to agricultural producers, farmers, and ranchers. Nurseries are eligible to apply for economic injury disaster loans for losses caused by drought conditions.
The loan amount can be up to $2 million with interest rates of 3.04 percent for small businesses and 1.875 percent for private nonprofit organizations, with terms up to 30 years.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.
Applicants may apply online using the Electronic Loan Application (ELA) via the SBA’s secure website at DisasterLoanAssistance.sba.gov/ela/s/ and should apply under SBA declaration # 17674.
Disaster loan information and application forms may also be obtained by calling the SBA’s Customer Service Center at 800-659-2955 (if you are deaf, hard of hearing, or have a speech disability, please dial 7-1-1 to access telecommunications relay services), or sending an email to DisasterCustomerService@sba.gov.
Loan applications can be downloaded from the SBA’s website at sba.gov/disaster. Completed applications should be mailed to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
Submit completed loan applications to the SBA no later than June 5, 2023.
For more information, please refer to this fact sheet or this news release by the SBA.