In response to a Presidential disaster declaration issued on May 23, 2025, the U.S. Small Business Administration (SBA) has announced the availability of low-interest federal disaster loans for businesses, private nonprofits, and residents in Kentucky affected by severe storms, straight-line winds, and tornadoes that occurred on May 16-17.
The disaster declaration covers the primary counties of Caldwell, Laurel, Pulaski, Russell, Trigg, and Union. These areas are eligible for both Physical Damage Loans and Economic Injury Disaster Loans (EIDLs) from the SBA. Adjacent counties in Kentucky such as Adair and Calloway are eligible to apply only for EIDLs. This eligibility extends to certain counties in Illinois, Indiana, and Tennessee.
Businesses and nonprofits can apply for business physical disaster loans with borrowing limits up to $2 million to repair or replace damaged real estate and other assets. Homeowners may borrow up to $500,000 for primary residence repairs while renters can apply for up to $100,000 for personal property replacement.
Applicants might also qualify for a loan increase of up to 20% of their physical damage verified by the SBA for mitigation purposes. Improvements could include strengthening structures against high wind damage or installing storm shelters.
Interest rates are set at 4% for small businesses, 3.62% for private nonprofits, and 2.81% for homeowners and renters with terms extending up to 30 years. Interest does not accrue until one year after the first loan disbursement.
Chris Stallings from the Office of Disaster Recovery and Resilience at the SBA stated: “SBA’s Business Recovery Centers have consistently proven their value to business owners following a disaster.” He encouraged business owners to visit these centers where specialists will assist them through the application process.
Starting Tuesday, May 27th, SBA customer service representatives will be available at the Business Recovery Center in Laurel County to provide assistance with applications. Walk-ins are welcome but appointments can be scheduled online.
Survivors should not delay applying for a disaster loan while waiting on insurance settlements. The SBA can issue loans covering total losses within its limits if borrowers agree that insurance proceeds will repay part of these loans.
Changes in FEMA's Sequence of Delivery now encourage survivors to apply simultaneously for FEMA grants alongside SBA loans. While FEMA grants cover necessary expenses not covered by insurance or other sources, SBA loans aim at long-term recovery efforts.
Applications can be submitted online via sba.gov/disaster or through contacting their Customer Service Center directly by phone or email. Deadlines are set as July 22nd for physical property damage applications and February 23rd next year for economic injury applications.