Alternative financial services often spike in times of hardship, as both traditional lenders and potential borrowers are put into less-than-desirable positions. While consumer credit
has been on the rise in recent months, short term lending
and other forms of alternative credit
have spiked in the wake of substantially disastrous drought across the nation. The Murphysboro American recently reported that the U.S. Department of Agriculture has extended a drought disaster declaration to several counties in Illinois. According to the source, six counties have been designated as primary drought disaster areas, while two others have been dubbed contiguous drought disaster areas. The importance of this declaration hits home with farmers, as it allows those that are losing substantial yields of crops - and thus revenues - because of inadequate moisture to seek out and obtain alternative loans with exceptional benefits. These loans are marked by far lower interest rates than traditional channels, while the federal and state governments will help to facilitate the process of acquiring financing. This process works to ensure that farmers are not put out of business by the historic drought currently sweeping the nation. The Murphysboro American further explained that the interest rates of these loans for farmers in the disaster areas are standing at 2.25 percent, while Conservation Reserve Program farms in these regions will see interest rates reduced to 10 percent from the standard 25 percent. "This is good news for farmers in drought-stricken areas," US. Congressman Jerry Costello explained, according to the source. "Not only will loans help them through a tough season, but the efficiencies in the process should allow them to get help faster. I will continue to work with the Illinois congressional delegation, the USDA and our farmers as drought conditions persist." The Wall Street Journal reports that the list of drought-affected states and counties has grown substantially in the past month. Now, the USDA has announced that 39 counties in 8 states have been designated as drought disaster areas. While the WSJ notes that these declarations will be a substantial push in the right direction because of the now-available special loans, the forecast continues to darken for many agriculture-based business owners. The source explains that the USDA dropped July corn yield forecasts 20 bushels per acre from June's figures.