California Governor Schwarzenegger Promises Loans to Small Businesses Affected by Wildfires

California Governor Arnold Schwarzenegger announced today that California will guarantee loans for farmers, agriculture-based businesses and other small business in areas affected by the wildfires in Southern California. The Small Business Disaster Assistance Loan Guarantee Program will make $7 million available to small businesses that are losing money and property due to the fires.

The Small Business Disaster Loan Guarantee Program was started in 1989 following the devastation caused by the Loma Prieta Earthquake. The Program is meant to help businesses that incur hardship during declared states of emergency. Earlier this year, the Program also helped those small agriculture-based businesses that suffered losses during a freeze in January.

Businesses that are not agricultural in nature may be eligible for loans through the federal government's Small Business Administration, but the California Small Business Disaster Loan Guarantee Program can provide the business a bridge loan until that business receives a SBA loan.

Farms that qualify include those that produce food or fiber, or those involved in ranching. Nurseries and landscaping businesses that sell plants can also qualify. The business must suffer either physical or economic injury to qualify for assistance. Also, the business owner must not be able to receive a loan through other methods.

The Governor said in a press release issued by his office, "These overwhelming wildfires have been extremely devastating and I will do everything I can to help these communities recover. This program will keep the economy moving by helping small businesses that may not qualify for federal aid and provide interim funding for those businesses waiting for federal assistance to arrive."

The California wildfires prompted Schwarzenegger to declare a state of emergency for Los Angeles, Orange, Riverside, San Bernardino, San Diego, Santa Barbara, and Ventura counties. Those counties cover almost the entire bottom fifth of the State of California. The State Forestry Service counts 23 separate fires among the seven counties. Thirteen of those fires, as of today, are listed as 100 percent contained, including all of the fires in Ventura, Riverside, and Santa Barbara counties.

San Diego County is the worse hit of the area, with nine separate fires across nearly 300,000 acres. In the Witch Fire alone, more than 650 homes have been destroyed and 250 homes are damaged. Another 5,000 are threatened. The Witch Fire has decimated thirty commercial properties, including small agricultural businesses, and ten more have suffered significant damage. 1,500 more commercial buildings are threatened. The estimated cost of damage from this one fire alone is over $5 million.

Sources: The Office of the Governor of the State of California, California Small Business Disaster Loan Guarantee Program, California Department of Forestry