McGovern Announces Federal Aid Available to Central Mass. Small Businesses Impacted by August Drought

Statement

Today Congressman Jim McGovern (MA-02) announced that the U.S. Small Business Administration will make federal economic injury disaster loans available to small businesses, small agricultural cooperatives, small businesses engaged in aquaculture and most private non-profit organizations of all sizes located in Worcester County as a result of the drought that began on Aug. 16, 2016.

"I have heard from small business owners across Central Massachusetts who have been impacted by the drought this summer. These loans will provide much-needed relief as local small businesses work to recover," Congressman McGovern said. "Our small businesses and local non-profits are key to keeping our communities strong and our economy growing in Central Massachusetts. I encourage all eligible residents to apply now so that they can get the help they need."

"These counties are eligible because they are contiguous to one or more primary counties in
New Hampshire. 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," said Skaggs.

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. 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 2.625 percent for private non-profit organizations of all sizes and 4 percent for small businesses, 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.

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