SBA opens disaster loan relief for Virginia drought-hit businesses and nonprofits

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SBA disaster loans for Virginia drought

Highlights

The SBA opened its Economic Injury Disaster Loan program for drought-impacted businesses and nonprofits in multiple Virginia and North Carolina counties, excluding traditional agricultural producers.
Eligible applicants can seek up to $2 million in loans at interest rates as low as 4% for businesses and 3.625% for nonprofits, with repayment deferred and no interest accrual for 12 months.
The application deadline is January 19, 2027, and funds may cover working capital needs such as payroll, fixed debts, and accounts payable arising from drought-related disruption.

Loan program scope and application terms

As announced by the U.S. Small Business Administration, the disaster declaration covers counties across Virginia, including Albemarle, Augusta, Bedford, Franklin, Halifax, Pittsylvania and Prince Edward, along with Caswell, Rockingham and Stokes counties in North Carolina.

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

The loans are intended to support working capital needs caused by the disaster, even when an applicant has not suffered physical damage. Funds may be used for fixed debts, payroll, accounts payable and other bills that cannot be paid because of the disruption.

The loan amount can reach $2 million, with interest rates as low as 4% for small businesses and 3.625% for private nonprofits. Terms can extend up to 30 years, while interest does not accrue and payments are not due until 12 months after the first loan disbursement. The deadline to return economic injury applications is Jan. 19, 2027.

Recovery support for affected communities

Chris Stallings, associate administrator of the Office of Disaster Recovery and Resilience at the SBA, says the assistance follows a disaster declaration by the U.S. Secretary of Agriculture and is designed to help communities recover from drought-related economic harm.

For affected employers and nonprofit groups, the financing provides a bridge for routine operating expenses during a period of reduced cash flow. The measure extends federal support beyond direct physical damage programs and targets the broader business impact of prolonged dry conditions.

Our earlier report on the False Claims Act settlement involving Broadway Electric and Cornerstone Contracting detailed allegations that the firms improperly used pass-through small businesses to win set-aside contracts intended for service-disabled veteran-owned companies. We noted that the $21.3 million resolution underscored heightened federal scrutiny of small-business program eligibility and the legal risks of misrepresenting qualifications or control arrangements.

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