A months-long drought that parched much of Alabama has led to federal disaster declarations and opened up new financial aid options for small businesses, private nonprofits and farmers struggling to recover.

The U.S. Small Business Administration is offering low-interest Economic Injury Disaster Loans to small businesses and eligible nonprofits in counties affected by drought conditions that began Dec. 1, 2024. At the same time, the U.S. Department of Agriculture has designated 38 Alabama counties as natural disaster areas, making farmers in those areas eligible for emergency loan assistance through the USDA's Farm Service Agency.

"The drought affected over half of the counties in Alabama," said Agriculture and Industries Commissioner Rick Pate in a news release. "We encourage farmers to reach out to their local USDA offices for details about available funding."

The SBA's loan program provides up to $2 million to cover working capital needs such as payroll, debts and other bills. These loans are available even if no physical damage occurred and are offered with interest rates as low as 4 percent for small businesses and 3.625 percent for private nonprofits. Repayment terms can extend up to 30 years, and the first payment is deferred for 12 months after disbursement.

"Through a declaration by the U.S. Secretary of Agriculture, SBA provides critical financial assistance to help communities recover," said Chris Stallings, associate administrator of the SBA's Office of Disaster Recovery and Resilience. "We're pleased to offer loans to small businesses and private nonprofits impacted by these disasters."

Eligible Alabama counties include Baldwin, Mobile and others. Counties in neighboring Mississippi and Tennessee are also covered under the SBA disaster declaration. The deadline to apply is Nov. 25. For details or to apply, visit sba.gov/disaster or call (800) 659-2955. Email assistance is available at disastercustomerservice@sba.gov. Telecommunications relay services can be accessed by dialing 7-1-1.

Meanwhile, the USDA disaster designation covers 20 primary counties and 18 contiguous counties in Alabama. Farmers in these areas can apply for emergency loans to recover from crop losses, replanting costs or other operational setbacks tied to the drought.

Primary disaster counties include Autauga, Chilton, Choctaw, Clarke, Dallas, Franklin, Greene, Hale, Lauderdale, Lawrence, Limestone, Lowndes, Madison, Marengo, Morgan, Perry, Sumter, Washington, Wilcox and Winston.

Contiguous counties include Baldwin, Bibb, Butler, Colbert, Coosa, Crenshaw, Cullman, Elmore, Jackson, Marion, Marshall, Mobile, Monroe, Montgomery, Pickens, Shelby, Tuscaloosa and Walker.

The USDA's declaration was issued March 25, and farmers have eight months from that date to apply for assistance. Each application is reviewed on a case-by-case basis.

Drought conditions were verified by the U.S. Drought Monitor, which documented counties facing prolonged periods of severe to exceptional drought intensity during the 2025 crop year.

Farmers can visit www.fsa.usda.gov/programs-and-services/farm-loan-programs to learn more about loan eligibility. To find the nearest USDA Service Center, visit www.farmers.gov/working-with-us/service-center-locator or call the Alabama Department of Agriculture and Industries at (334) 240-7100.