Oklahoma small businesses offered drought relief loans from SBA

Financial relief is available from the Small Business Administration for non-farm businesses in 77 Oklahoma counties and neighboring states to apply for low-interest federal disaster loans, announced Alfred E. Judd, director of SBA’s Disaster Field Operations Center-West.

2012 was a historic year for extreme weather that included drought, wildfires, hurricanes and storms, according to the National Oceanic and Atmospheric Administration (NOAA). Secretary Tom Vilsack declared the drought as an agricultural disaster on Jan. 9.

“These loans offset economic losses because of reduced revenues caused by the drought that began on Nov. 15 …,” Judd said. “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.”

Man-made reservoirs and retention ponds are not doing well in central Oklahoma, said Ray Vaughn, Oklahoma County Commissioner for District 3.

“If you don’t have a pretty good water supply it’s drying up and going away,” he said of the drought. “Go drive by Lake Hefner and that would be your poster child for this thing,” Vaughn said. The Oklahoma City lake is currently down 17 feet, according to the City of Oklahoma City.

“I’m surprised we haven’t had more issues with our aquifer at this point, but it seems to be holding fairly steady,” Vaughn said. “But certainly the surface water is not what it has been. I’ve never seen it so bad.”

Small, non-farm businesses, small agricultural cooperatives, small businesses engaged in agriculture and most private, nonprofit organizations of any size may qualify for Economic Injury Disaster Loans (EIDLs) of up to $2 million to help meet financial obligations and operating expenses, which could have been met had the disaster not occurred.

Businesses that were hindered by the drought may have included but are not limited to those in landscaping, companies dealing with plants, recreational use such as boat rentals, Vaughn said.

“Eligibility for these loans is based on the financial impact of the disaster only and not on any actual property damage. These loans have an interest rate of 4 percent for businesses and 3 percent for private, nonprofit organizations, a maximum term of 30 years, and are available to small businesses and most private, nonprofit without the financial ability to offset the adverse impact without hardship,” Judd reported.

Agricultural enterprises should contact the Farm Services Agency about the U. S. Department of Agriculture assistance made available by the secretary’s declaration. However, in drought disasters nurseries are eligible for SBA disaster assistance.

The City of Edmond only has been purchased water from Oklahoma City during summer peak months for consumption, said Kris Neifing, Edmond Water Resources superintendent. The record year for purchasing water from Oklahoma City was 2011 with 110 million gallons. Last year the city purchased 55 million gallons from Oklahoma City, Neifing said. Arcadia Lake remains at 100 percent water capacity, according to the Association of Central Oklahoma Governments.

“Arcadia is all urban runoff mostly. We’re in a fortunate situation,” Neifing said. Water depletion in Oklahoma City would not affect Edmond’s water rates until summer months, depending on drought and when water is at a peak demand to cause the need to purchase water from Oklahoma City, Neifing said.

“Then we would have to go into mandatory rationing if they are mandatory rationing,” he said. “If they can’t sell us water then we’ll have to ration ourselves.”

Applicants for SBA loans may apply online using the Electronic Loan Application via SBA’s secure Web site at https://disasterloan.sba.gov/ela.

Disaster loan information and application forms also are available from SBA’s Customer Service Center by calling SBA toll-free at 800-659-2955, emailing disastercustomerservice@sba.gov, or visiting SBA’s website at www.sba.gov/services/disasterassistance. Individuals who are deaf or hard-of-hearing may call 800-877-8339. The deadline to apply for these loans is Sept. 9.

More information about the U.S. drought is available from NOAA at http://www.cpc.ncep.noaa.gov/products/Drought.

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Small Business