SBA Economic Injury Loans Help W. Va. Businesses Following Storms

September 14, 2004

The U.S. Small Business Administration announced that low-interest loans to replenish working capital are available to West Virginia small businesses impacted by the July storms and subsequent federal disaster declaration.

SBA Area Director William Leggiero, Jr. said the working capital loans are being offered to alleviate economic injury associated with the disaster and are available regardless of whether the business sustained any physical damage from the storm. He said flooded, debris-choked roadways likely caused a number of businesses to suffer a serious loss of revenue that normally would have been used to cover operating expenses and debt payments.

Leggiero said small businesses and small agricultural cooperatives that have experienced substantial economic injury resulting from the disaster, might be eligible for the SBA’s Economic Injury Disaster Loan (EIDL) program. Loans, which may go as high as $1.5 million at an interest rate of 2.9 percent, can be made for terms up to 30 years.

Here are the EIDL program’s high points:

* EIDL’s are intended to provide operating funds until an affected small business can recover from a declared disaster. Under certain conditions, the loan may be used to make payments on short-term notes, accounts payable and installment payments on long-term notes.

* EIDL’s may be used to repay bridge loans or interim financing obtained to maintain operations in the immediate aftermath of the disaster.

* Private credit sources, including banks, must be used as much as possible to overcome the economic injury. The SBA can provide EIDL assistance only to the extent the business and its principals cannot recover by using its own resources and normal lending channels.

Small businesses in the primary declared counties of Fayette, Lincoln, Logan and Mingo, as well as the contiguous counties of Boone, Cabell, Clay, Greenbrier, Kanawha, McDowell, Nicholas, Putnam, Raleigh, Summers, Wayne and Wyoming in the State of West Virginia; Martin and Pike in the State of Kentucky; and Buchanan in the Commonwealth of Virginia are eligible to apply for an EIDL.

For additional information on the economic injury loan program, call 1-800-U ASK SBA (1-800-827-5722).

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