Small Business Loan in Texas
Back in June, the Small Business Administration announced SBA disaster loans would be made available to those that can show they have suffered a loss of revenue due to the drought in Texas – where all counties are now eligible for assistance. According to Reporter-News in Abilene, TX, these loans are not hard to apply for:
Scotty Arnold, lead business development specialist for the Small Business Administration’s Lubbock office, said the loans are available to basically “any type of business that deals with people directly affected, which is the ranchers and farmers.”
He added: “Small businesses in rural communities really need to look at it.”
However, as of late August, only 20 Texas businesses had applied for loans, according to SBA spokesman Rick Jenkins, with only three approved for a total of $667,500.
Why Business Need SBA Disaster Loans
The SBA disaster loans are designed to provide working capital to businesses to help them pay the bills, and each loan is capped at $2 million.
Who Can Get SBA Disaster Loans
Agriculture Department and SBA Disaster Loans
The Agriculture Department has to the date designated 213 of Texas’ counties directly affected by drought as disaster areas, and the remaining 41 are also qualified for assistance because they are contiguous. Thirty-two counties in Louisiana, Oklahoma, Arkansas, and New Mexico have also received the designation because they are adjacent to Texas counties.
Agriculture Secretary Tom Vilsack says many producers have lost their entire crop because of drought and wildfires and added “President Obama and I want these farmers and ranchers to know that we will support them through the recovery process and help them once again become productive suppliers of food, fiber, and fuel that keep America prospering. This designation will help provide that support.”
Ranchers and farmers must qualify for the loans that will come from the USDA’s Farm Service Agency. Due to wildfires out of control in March, the SBA had already stepped up offering disaster loans and economic injury loans to Texas residents in many counties. “Low-interest federal disaster loans are available to homeowners, renters, businesses of all sizes and private, non-profit organizations whose property was damaged or destroyed by the fires,” said Calvin Davis, SBA’s Lubbock District Director.
A business plan writer can help prepare a concrete application for an SBA disaster loan, and help farmers and small businesses alike recover from the Texas drought. Interest rates can be as low as 2.563 percent for homeowners and renters, 3 percent for private, non-profit organizations, and 4 percent for businesses, with terms up to 30 years. SBA Loan amounts and terms are set by SBA and are based upon each applicant’s financial condition.
Getting a loan approved is the tricky part – the SBA generally looks at credit scores as well as past tax returns, although the criteria may not be as strict as with a traditional lending source. A well-put-together business plan describing what the money is meant for and how it will be spent increases the chances of being approved over an application with no clear plan for future success.