SBA opens disaster loan relief for Colorado businesses hit by drought

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Ashutosh Sureka

01.06.2026

SBA opens disaster loan relief for Colorado businesses hit by drought — Disaster loans for drought-hit Colorado

Colorado small businesses and private nonprofits in several southeastern counties can now seek low-interest federal disaster loans after drought conditions beginning April 28 triggered economic losses. The relief also extends to eligible entities in three neighboring Kansas counties, with loan terms reaching up to 30 years and deferred initial payments.

Highlights

The U.S. Small Business Administration declared economic injury disaster loan access for businesses in six Colorado and three Kansas counties affected by drought.
Eligible small businesses, cooperatives, nurseries, and nonprofits can borrow up to $2 million, with interest rates as low as 4% and 3.625% for nonprofits, for terms up to 30 years.
Loan payments are deferred and interest does not accrue for 12 months after first disbursement, aiding working capital needs caused by drought-related financial losses.

Drought loan program covers Colorado and nearby Kansas counties

As announced by the U.S. Small Business Administration, the disaster declaration covers the Colorado counties of Baca, Bent, Kiowa, Las Animas, Otero and Prowers, along with the Kansas counties of Greeley, Hamilton and Stanton.

Under the declaration, the agency's Economic Injury Disaster Loan program is available to small businesses, small agricultural cooperatives, nurseries and private nonprofits, including faith-based organizations, that face financial losses directly tied to the drought. The SBA does not provide these disaster loans to agricultural producers, farmers or ranchers, except for small aquaculture enterprises.

The financing is intended to support working capital needs caused by the disaster, even when an applicant has not suffered physical damage. Eligible borrowers can use the funds to cover fixed debts, payroll, accounts payable and other bills they cannot pay because of the drought.

Financing terms aim to support recovery

The loan amount can reach $2 million, with interest rates as low as 4% for small businesses and 3.625% for private nonprofits, and terms of up to 30 years. Interest does not accrue, and payments are not due until 12 months after the first loan disbursement, while final loan amounts and terms depend on each applicant's financial condition.

Chris Stallings, associate administrator of the Office of Disaster Recovery and Resilience at the SBA, says the assistance is designed to help communities recover after a declaration by the U.S. Secretary of Agriculture. Applicants can submit requests online through the SBA disaster assistance portal, or contact the agency's customer service center by phone or email for more information.

Our earlier coverage of the House Small Business Committee hearing on “Restoring America’s Industrial Base” outlined how lawmakers are examining small firms’ role in national security through innovation, critical technology development, and supply-chain resilience. The session is expected to focus on barriers and opportunities in defense procurement and production capacity that could shape future policy for smaller contractors and industry groups.

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