Sara Routhier, Managing Editor of Features and Outreach, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming worl...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Dec 2, 2011

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The Small Business Administration (SBA) announced today that it will be making personal disaster loans available to multiple counties in Minnesota and New York.

 

Minnesota is to receive small business personal loans as a result of damages done by excessive heat, rain, wind, frost and tornadoes that have been affecting the state since April, 2011.

 

New York will also receive SBA-backed personal loans due to excessive drought and rain that has been plaguing the state since early July.

 

These disaster loans are meant to pay fixed debts, payrolls, accounts payable, and other bills that the disasters have prohibited the payment of. They are not meant to replace any lost sales or profits that may have arose as a result of the disasters.

 

Some counties residing just out of these states, such as those in South Dakota and Pennsylvania are also eligible for these disaster loans. “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 the release.

 

The SBA announced this new volley of personal loans after the Secretary of Agriculture issued a disaster declaration to help those states. “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 assist eligible entities affected by the same disaster,” said Skaggs.

 

In order to qualify for the disaster loans, applicants must have suffered financial losses as a direct result of the disasters affecting their state. Only nurseries and aquacultural enterprises may receive a loan for damages arising from drought conditions.

 

Each of these states’ agricultural businesses that qualify for the SBA’s personal loans can receive up to $2 million with a 4 percent interest rate. Non-profit organizations can get the same amount at 3 percent. Both small businesses and non-profits can take their loans out with a term of up to 30 years. Amounts and terms will be determined on a case by case basis by the SBA, dependent upon the need and size of the applicant.