Back in June, the Small Business Administration announced 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.
The loans are designed to provide working capital to businesses to help them pay the bills, and each loan is capped at $2 million. SBA disaster loans are available to small, nonfarm businesses, including agriculture co-ops and most private, nonprofit organizations.
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.