NEW YORK (CNNMoney.com) -- The Small Business Administration is making low-interest "economic injury loans" to small firms on the Louisiana coast that have been hurt by last month's BP oil spill.
Under its Economic Injury Disaster Loans program, SBA is offering 30-year loans of up to $2 million, at a 4% interest rate, to affected businesses. The April 20 spill, which is still leaking oil, led to a ban on fishing along Louisiana's southeast coast.
Gov. Bobby Jindal officially requested the loans Tuesday, saying in a letter to the SBA that thousands of commercial fishermen in six parishes could suffer economic injury as a result of the spill.
"The closure of these vital fisheries will have a devastating impact to the economy of southern Louisiana," said Jindal.
Small businesses can begin applying for the loans today, Mills said, and they can also request deferrals on existing SBA disaster loans. The money can be used to to pay fixed debts, payroll, accounts payable and other bills that can't be paid because of the spill's impact.
"Many small businesses in the Gulf region earn their living by fishing in the waters on the coast," said SBA Administrator Karen Mills, in a conference call Thursday.
Jonathan Swain, the SBA's assistant administrator, said the agency has a loan reserve of $7.2 billion for its disaster assistance program. Of that, so far only $190 million has been allocated to 38 different disaster areas around the country, including the flooded areas of Tennessee.
"We have the resources necessary to meet the needs [of businesses hurt by the oil spill,]" he said. "We don't expect that all of the funds will be needed."
SBA also encouraged local small businesses to file claims with BP (BP), and said that borrowers may be required to use any claim payments to help repay the SBA loans.
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||3.80%||3.88%|
|15 yr fixed||3.20%||3.23%|
|30 yr refi||3.82%||3.93%|
|15 yr refi||3.20%||3.23%|
Today's featured rates:
Land O'Lakes CEO Beth Ford charts her career path, from her first job to becoming the first openly gay CEO at a Fortune 500 company in an interview with CNN's Boss Files. More
Honda and General Motors are creating a new generation of fully autonomous vehicles. More
In 1998, Ntsiki Biyela won a scholarship to study wine making. Now she's about to launch her own brand. More
Whether you hedge inflation or look for a return that outpaces inflation, here's how to prepare. More