Drought: Disaster assistance available for Hawaii’s affected small businesses

HONOLULU—The recently completed October 2009 through April 2010 Hawaii wet season, or hoolio, ranks as the driest in the past 30 years and one of the driest in the past 55 years, the National Weather Service said. The finding is based on an average of wet season rainfall rankings from seven reporting stations across the state with continuous records. Existing agricultural drought in the eastern half of the state worsened particularly in the Kona, Kau, and leeward Kohala sections of Hawaii Island since the development of an El Nino last summer.

As a result, drought-affected small, non-farm businesses in the counties of Hawaii, Honolulu, Kauai, and Maui and the neighboring county of Kalawao are now eligible to apply for low-interest disaster loans from the U. S. Small Business Administration (SBA). Last month, agriculture businesses were allowed to begin applying for Farm Service Agency emergency loans and the Supplemental Revenue Assistance Program.

“These loans offset economic losses because of reduced revenues caused by drought beginning January 1, 2010,” announced Alfred E. Judd, Director of SBA’s Disaster Field Operations Center West. “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, non-farm businesses, small agricultural cooperatives, and most private, non-profit 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.

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, non-profit organizations, a maximum term of 30 years, and are available to small businesses and most private, non-profits without the financial ability to offset the adverse impact without hardship.

By law, SBA makes EIDLs available when the U. S. Secretary of Agriculture designates an agricultural disaster. Secretary Tom Vilsack declared this disaster at the request of Gov. Linda Lingle.

Businesses primarily engaged in farming or ranching are not eligible for SBA disaster assistance. Agricultural enterprises should contact the Farm Services Agency (FSA) about the U.S. Department of Agriculture (USDA) assistance made available by the Secretary’s declaration. However, in drought disasters, nurseries are eligible for SBA disaster assistance.

Information and application forms are available from SBA’s Customer Service Center by calling (800) 659-2955, emailing [email protected], or visiting SBA’s website at www.sba.gov/services/disasterassistance. Hearing impaired individuals may call (800) 877-8339.  Applicants may also apply online using the Electronic Loan Application (ELA) via SBA’s secure website at https://disasterloan.sba.gov/ela.

The deadline to apply for these loans is March 14, 2011.