AUGUSTA (AP) – Responding to a severe outbreak of red tide, the U.S. Small Business Administration has announced that federal disaster loans bearing low interest are available to small businesses that have been affected by the toxic algae bloom.

Red tide has been contaminating shellfish along parts of the coast of Maine since May.

SBA Administrator Hector Barreto said the agency, at the request of Gov. John Baldacci, “evaluated the impact the red tide is having on small businesses in Maine and determined a disaster declaration is warranted.”

In a statement, Barreto said: “This declaration makes working capital loans available to small businesses that suffered economic injury as a direct result of the impact this event is having on the fishing industry.”

The agency said eligible small businesses may qualify for loans of up to $1.5 million with an interest rate of 4 percent, with terms extending up to 30 years.

“I’m pleased the SBA has recognized how devastating red tide has been and could still be on small businesses in Maine – from fishermen to seaside restaurants,” U.S. Sen. Susan Collins said in a statement.

“This provides some economic relief to those businesses that are struggling because of the impact red tide has had on Maine’s shellfish industry. This year’s outbreak of red tide is the worst experienced by New England in over three decades. This could have a devastating and lasting impact on an industry that generates $75 million for Maine each year,” Collins said.

On Wednesday, Maine’s congressional delegation announced that the U.S. Department of Commerce has declared a disaster in the Maine shellfish fishery due to the red tide outbreak.

The declaration allows Congress to appropriate emergency funds for the shellfishing industry, which has been devastated by the toxic algae bloom that has closed clam flats from Downeast Maine to Martha’s Vineyard in Massachusetts.

AP-ES-06-24-05 0216EDT