U.S. Senator Joni Ernst says it’s been difficult for Iowans trying to recover from this year’s floods and tornadoes to navigate federal disaster programs.

“FEMA and SBA did quickly set up recovery centers and I want to thank them for that,” Ernst says, “but business owners were left frustrated by the two agencies’ lack of coordination and incompetence,.”

Ernst, a Republican from Red Oak, says some Iowans initially got bad information about whether they were eligible for Small Business Administration loans. “In Shelby County, which was hit by tornadoes in the spring, SBA provided outdated and completely wrong information including sending disaster victims to a dead website,” Ernst says. “They didn’t even realize this until my staff members brought this to their attention.”

SBA Economic Injury Disaster Loans were made available to Iowans hit by historic flooding and devastating tornadoes in counties that have been declared presidential disaster areas. The loans have an interest rate of 4% for businesses. According to recent data from the Federal Reserve, average rates on business bank loans typically fall between 6.14% to 12.47%.

Ernst says she’s heard from small business owners in rural Iowa hit by this year’s severe weather that they got better loans from their local community bank than were offered by the SBA. “Small business owners who lose their livelihoods in a natural disaster have no time to spare,” Ernst says. “It’s incredibly frustrating to repeatedly hear from those seeking SBA assistance that they thought it was a waste of time, so much so that many walked away and didn’t complete applications.”

Ernst has accused the SBA of misusing its loan authority, “picking winners and losers” with investments in firms working with artificial intelligence or “green” companies focused on environmental projects. She’s also critical of the agency’s total loan portfolio.

“SBA’s lending in rural areas is abysmal, at just around 15% in the agency’s two main programs,” Ernst said this week during a Senate hearing.

Nearly 18% of U.S. residents live in rural areas. Ernst suggested if SBA lending were in line with the population, another $1.3 billion worth of loans would be made to rural entrepreneurs.

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