Small businesses and private nonprofits across a swath of Minnesota hit hard by drought can now apply for federal disaster loans of up to $2 million, with interest rates as low as 4% and a full year before any payments come due. The low-interest loan program comes from the U.S. Small Business Administration, which says it is stepping in to help operations impacted by the ongoing dry conditions.
According to Fergus Now, the SBA is making the low-interest federal disaster loans available to eligible small businesses and private nonprofit organizations impacted by drought. As reported by Willmar Radio, 14 Minnesota counties qualify for the program: Benton, Cass, Crow Wing, Douglas, Lincoln, Lyon, Mille Lacs, Morrison, Otter Tail, Pipestone, Stearns, Todd, Wadena and Yellow Medicine.
That county list isn't settled, though. A separate report from KNSI names a much longer roster of 23 eligible counties — Aitkin, Anoka, Benton, Carver, Chisago, Crow Wing, Douglas, Hennepin, Isanti, Kanabec, Kandiyohi, McLeod, Meeker, Mille Lacs, Morrison, Pine, Pope, Ramsey, Sherburne, Stearns, Todd, Washington and Wright — which overlaps with but doesn't match the shorter list. Neither account cites an official SBA source for its county count, so business owners outside the overlapping counties may want to check their own eligibility directly before assuming they're excluded.
What the Loans Cover and How They're Structured
Under the terms described, drought-impacted businesses can apply for loans up to $2 million, with interest rates as low as 4%. The loans can last up to 30 years, and there's no interest or required payments during the first 12 months following disbursement — a cushion meant to give struggling operations breathing room before repayment begins.
Businesses can apply online at sba.gov/disaster. The same structure echoes a 2023 SBA drought-loan program in Minnesota, which according to a legacy SBA announcement offered loans up to $2 million with rates of 4% for small businesses and 2.375% for private nonprofits, also with terms up to 30 years and interest deferred for the first 12 months. That older announcement is historical context tied to a separate disaster declaration, not confirmation of the current program's exact terms.
Who Else May Qualify, and the Application Window
Per KNSI, eligible applicants for the current round include small businesses, private nonprofits and faith-based organizations, small agricultural cooperatives and nurseries, and small aquaculture enterprises affected by drought since August 11. The outlet also reports a June 21, 2027 deadline to apply, though that date and the broader applicant list are not corroborated here by a current official SBA source.
The federal loan push follows a related move from the U.S. Department of Agriculture. According to the Farm Service Agency, a USDA Secretarial natural-disaster designation allows the agency to extend emergency credit to producers recovering from natural disasters through its own emergency loan program — a separate track from the SBA's business-focused loans, but one aimed at the same underlying drought conditions.
For now, the clearest path forward for affected business owners is the same one outlined across the available reporting: head to sba.gov/disaster to check eligibility and start an application. With two conflicting county lists circulating and no single official source yet confirming which is current, business owners in counties named on either list may be best served by applying directly and letting the SBA sort out the determination.
