Arkansas businesses impacted by drought may apply for SBA loans

Small, nonfarm businesses in seven Arkansas counties can apply for low-interest federal disaster loans from the U.S. Small Business Administration. The loans will offset economic losses caused by the drought that started on Oct. 15, according to a news release.

Affected businesses in the following counties can apply for the loans: Newton, Boone, Carroll, Johnson, Madison, Pope and Searcy. SBA working capital loans become available when farmers face crop losses, and the U.S. Secretary of Agriculture declares a disaster.

“These loans are the backbone that helps rural communities bounce back and thrive after a disaster strikes,” said Francisco Sánchez Jr., associate administrator for the Office of Disaster Recovery and Resilience at the Small Business Administration. “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.”

Small, nonfarm businesses, small agricultural cooperatives, small businesses engaged in aquaculture, and most private nonprofit organizations of any size may qualify for Economic Injury Disaster Loans of up to $2 million to help meet financial obligations and operating expenses which could have been met had the disaster not happened, the release shows.

“Eligibility for these loans is based on the financial impact of the disaster and not on any actual property damage,” Sánchez said. “These loans have an interest rate of 4% for businesses and 3.25% for private nonprofit organizations, a maximum term of 30 years, and are available to small businesses and most private nonprofits without the financial ability to offset the adverse impact without hardship.”

Interest does not begin to accrue until 12 months from the date of the loan, and repayment begins 12 months from the date of the first disbursement.

According to the release, as of Oct. 15, funds for the Disaster Loan Program have been expended. No new loans can be issued until Congress appropriates additional funding. Applications will continue to be accepted and processed so that residents and businesses can receive assistance when funding becomes available.

By law, the Small Business Administration makes Economic Injury Disaster Loans available when the Secretary of Agriculture designates an agricultural disaster. This disaster was declared on Oct. 21.

Businesses primarily engaged in farming or ranching are not eligible for disaster assistance from the Small Business Administration. Agricultural companies should contact the Farm Services Agency about the U.S. Department of Agriculture assistance made available by the secretary’s declaration. However, nurseries are eligible for disaster assistance from the Small Business Administration.

Applicants can apply online. More information about disaster assistance is available online or by calling 800-659-2955 or emailing [email protected]. The deadline to apply for economic injury is June 23, 2025.