Flooded Out in Central Iowa or Blair County? The SBA Disaster Loan Window Closes Sept. 21

There’s a side office at the Fourmile Community Recreation Center on Easton Boulevard in Des Moines where, weekdays from 8 a.m. to 5 p.m., Small Business Administration staff will sit down with you and help fill out a disaster loan application ^[2]. It opened July 24 and closes Aug. 19 ^[2]. If your shop, office or warehouse took water in the July 2-4 storms in central Iowa, or in the July 5-6 flooding in and around Blair County, Pennsylvania, this column is about money you may be able to borrow, and the Sept. 21 deadline to ask for it ^{[1, 3]}.

What the SBA declared

These are “administrative” declarations, issued by the SBA under its own regulations (the notices cite 13 CFR 123.3(b)), not presidential disaster declarations ^{[1, 3]}. In Iowa, the agency acted on July 23 after Gov. Kim Reynolds asked on July 20 ^[2]. The notice ran in the Federal Register on July 28 ^[1].

Iowa (disaster IA-20015): Polk is the primary county, and Boone, Dallas, Jasper, Madison, Marion, Story and Warren are covered as contiguous counties ^[1]. The incident: severe storms, heavy rain and flash flooding, July 2 through July 4 ^[1].

Pennsylvania (disaster PA-20037): The SBA declared on July 21 for Blair County, with Bedford, Cambria, Centre, Clearfield and Huntingdon as contiguous counties, for severe storms and flooding on July 5 and 6 ^[3].

The program itself is old. The 1958 Small Business Act gave the agency power to make loans “because of floods or other catastrophes” ^[5]. Back then the law capped those loans at 20 years ^[5]. Today’s terms run up to 30 ^[2].

Two kinds of loans, and you might want both

Here’s the short version:

• Physical disaster loans repair or replace what the storm damaged: real estate, machinery and equipment, inventory and other business assets. Businesses and nonprofits can borrow up to $2 million ^[2].
• Economic Injury Disaster Loans (EIDLs) are working capital. They cover payroll, fixed debts, accounts payable and other bills you couldn’t pay because of the disaster, and they’re available even if you had no physical damage ^[2].

There’s also a mitigation add-on. You may be able to increase a physical loan by up to 20% of your verified damage to pay for improvements that protect against the next storm, such as weather stripping or storm windows ^[2].

The rates in the two notices are the same ^{[1, 3]}:

Who	Physical damage	Economic injury
Business, credit available elsewhere	8.000%	not offered
Business, no credit available elsewhere	4.000%	4.000%
Private nonprofit	3.625%	3.625% (no credit elsewhere)

“Credit available elsewhere” means roughly what it sounds like: whether you could get the money from other sources. On a repair loan, it’s the difference between 4% and 8% ^[1]. Note that the economic injury row only has a rate for businesses without other credit ^[1].

Interest doesn’t start accruing, and no payment is due, until 12 months after the first disbursement ^[2]. The SBA decides eligibility, amounts and terms based on each applicant’s financial condition ^[2].

Does this apply to you?

Start with the county list. If your business is outside those 14 counties, these declarations don’t reach you ^{[1, 3]}. Inside them, here’s how it can play out.

Hypothetical one: a hardware store in Polk County with a flooded stockroom. Say a hypothetical store lost inventory and a walk-in cooler, and the SBA verifies $60,000 in physical damage. That’s the kind of loss a physical disaster loan covers ^[2]. The mitigation add-on could let it borrow up to 20% more, or $12,000, toward work that protects the building from the next flood ^[2]. If the SBA finds the store could get credit elsewhere, the rate on that loan is 8%; if not, 4% ^[1].

Hypothetical two: a coffee shop in Story County with a dry floor and an empty register. Say a hypothetical café took no water at all, but the roads around it flooded and customers stayed away for days. It has no claim for a physical loan. It may still qualify for an EIDL to cover payroll and bills it couldn’t pay because of the disaster ^[2]. That loan has a later deadline, April 23, 2027 ^[1].

Hypothetical three: a cattle operation in Marion County. Out. The SBA says it can’t make disaster loans to agricultural producers, farmers or ranchers, except aquaculture businesses ^[2]. A small agricultural cooperative is a different case: co-ops can apply for economic injury loans ^[2].

Pennsylvania businesses follow the same rules on the same Sept. 21 physical damage deadline, with a slightly earlier economic injury deadline of April 21, 2027 ^[3].

What to do before Sept. 21

Apply online through the MySBA Loan Portal at lending.sba.gov, or in person ^{[1, 3]}. In Iowa, there are two outreach centers: the Des Moines office, and one in the Human Services Building at 126 S. Kellogg Ave. in Ames, open weekdays 10 a.m. to 7 p.m. ^[2]. Both close Aug. 19 ^[2]. Walk-ins are welcome, and appointments can be booked at appointment.sba.gov ^[2]. The customer service line is (800) 659-2955 ^{[2, 4]}.

It’s worth pulling together a list of what was damaged, with photos and repair estimates, and a current picture of your finances, because your finances drive what the SBA will offer ^[2]. If you aren’t sure you’ll want the loan, keep the date in mind anyway. Iowa’s emergency management agency gives the same Sept. 21 cutoff for physical damage ^[4].

Remember last week’s column on the Senate IRS bill, and how none of it had a calendar date yet? This one is the opposite. Every date here is already set ^{[1, 3]}.

What I’m keeping an eye on

Aug. 19. The Des Moines and Ames outreach centers close that day ^[2]. After that, applications go online or by phone.

Tax relief. The SBA documents say nothing about federal tax deadlines for these counties ^{[1, 2, 3]}. I’ll be watching whether any separate IRS filing relief follows.

— Sally