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Fields were submerged under the waters of Cove Creek after heavy rains in May 2013. Photo by Anna Oakes

Originally published: 2014-01-25 16:43:49
Last modified: 2014-01-25 16:46:03

Disaster loans

by Anna Oakes

The U.S. Small Business Administration announced earlier this month that federal economic injury disaster loans are available to businesses in 25 North Carolina counties -- including Watauga, Ashe and Avery -- as a result of excessive rain and flooding in 2013.

Loans are available to small businesses, small agricultural cooperatives, small businesses engaged in aquaculture and most private nonprofit organizations of all sizes. The loan amount can be up to $2 million with interest rates of 2.875 percent for private nonprofit organizations of all sizes and 4 percent for small businesses, with terms up to 30 years.
The SBA determines eligibility based on the size of the applicant, type of activity and its financial resources. The working capital loans may be used to pay fixed debts, payroll, accounts payable and other bills that could have been paid had the disaster not occurred. The loans are not intended to replace lost sales or profits, however.

"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 eligible entities affected by the same disaster," said Frank Skaggs, director of SBA's Field Operations Center East in Atlanta, in a statement.

While the SBA Economic Injury Disaster Loan program is available to eligible farm-related and nonfarm-related entities, SBA cannot provide disaster loans to agricultural producers, farmers or ranchers, it said.

Brian Chatham, conservation technician for the Watauga County Soil and Water Conservation District, said he knew of at least one business in the area considering applying for the SBA loan as a result of last year's flood damage.

Farmers in the area are eligible for low-interest emergency loans from the U.S. Department of Agriculture's Farm Service Agency, thanks to a Sept. 18, 2013, disaster declaration. Watauga and Avery were among 13 counties designated as primary natural disaster areas, but farmers and ranchers in contiguous counties also qualify for the disaster assistance.

Farmers in eligible counties have eight months from the date of the declaration to apply for loans to help cover part of their actual losses.

Gay H. Isaacs, FSA director for Watauga and Avery counties, said about 50 farmers in the two counties have thus far taken advantage of the disaster assistance program, which requires farmers to do the repair work and then submit receipts for reimbursement. Isaacs said the FSA loans would cover up to 75 percent of the repair costs. Because of the continued rain last year and then the onset of winter, many have not yet been able to make their repairs, she said.

Chatham and Isaacs said damage in the two counties includes lost or uprooted fencing, landslides, gullies washed out in fields and damage to barns, outbuildings and farm roads. In Watauga, Chatham said the central and western sections of the county sustained the most damage, including properties in Boone, Blowing Rock, Valle Crucis and Bethel.

But, Isaacs said, "It was way worse in Avery County than it was here."

Chatham said the Soil and Water Conservation District also requested funding from the USDA's Emergency Watershed Protection Program, which can be used to remove debris from stream channels, culverts and bridges; to reshape and protect eroded banks; and to repair drainage facilities, levees and other structures.

"We are still in line to get some of that money," but it is currently on hold, Chatham said, because of assistance being provided to other areas of the country hit with disasters, including Colorado and South Dakota.

For more information about SBA loan applications, which are due no later than Sept. 8, call (800) 659-2955, email ( or visit

For more information about FSA assistance, call (828) 264-3850 or visit the office at 971 W. King St. in Boone.