New Bedford-based First Citizens’ Federal Credit Union, whose Hyannis branch is shown above, is among the financial institutions that are assisting businesses affected by the recent red tide algae bloom.

Although the red tide algae bloom that has plagued the shellfish industry is washing out to sea, the impacts may still be felt. A handful of local financial institutions are stepping up and offering their assistance to any business affected by this spring’s environmental disaster.

First Citizens’ Federal Credit Union, based in New Bedford, will provide businesses with help in completing the U.S. Small Business Administration’s Economic Injury Loan Application.

“The effects of the red tide are having a far-reaching impact on the local business community and we are pleased to partner with the SBA to offer this assistance,” said Charles R. Simpson Jr., president and chief executive officer of the credit union. “We want to encourage interested businesses to take advantage of this opportunity.”

The SBA loan is available to small businesses that are unable to pay bills or meet operating expenses due to the red tide disaster. The loan provides working capital to businesses, enabling them to recover from the economic impact of the red tide algae bloom. Small businesses may apply for loans up to $1.5 million with an interest rate of 4 percent and terms extending up to 30 years. The funds cannot be used for acquisition of physical assets or business expansion.

According to Perry Pedini, spokesman for the SBA, the deadline to apply for a loan is March 6, 2006.

Frank Almeida, business development officer at First Citizens’, said the SBA program represents the first time the credit union has offered such assistance. Because the institution is in many of the counties where red tide has surfaced, Almeida said the credit union decided to do something to help.

“Just seeing it impacted the communities we do service Â… we need to help these businesspeople,” Almeida said.

SBA’s disaster declaration includes the primary counties of Barnstable, Essex, Nantucket and Plymouth, as well as the contiguous counties of Dukes, Bristol, Norfolk, Middlesex and Suffolk.

Calling the credit union a “go-between,” Almeida said sometimes businesses simply need guidance when seeking financial help.

“The problem for small-business people is Â… the lack of familiarity with the [loan] paperwork,” said Almeida.

Besides offering guidance, the credit union has the loan paperwork on hand. That means small businesses don’t necessarily have to contact the SBA in order to obtain the loan application.

“We can provide the paperwork they need,” Almeida said.

In order to partner with the SBA for the program, a financial institution must undergo some training. Almeida said the SBA trained the credit union’s staff on how to make the loan process “seamless.” In a half-day training session, the SBA explained the application process, information on additional forms that may be necessary and how the SBA is structured to provide such assistance.

“Just basic info that we can provide,” Almeida said.

If other institutions are interested in signing on, Pedini said the SBA will consider other institutions and provide training.

First Citizens’ is also working with the Federal Home Loan Bank of Boston to provide assistance to borrowers.

While the SBA has a deadline and loan limit, the FHLBBoston is offering “lower-cost wholesale community development advances for disaster relief.” According to John Eller, senior vice president at FHLBBoston, there is no dollar limit on what a bank can request. No bank has requested a community advance yet, but Eller said he expects activity in the next 30 to 60 days. The program will remain open until requests slow.

‘Invaluable’ Help

Pennsylvania-based Sovereign Bank is also telling small businesses affected by red tide that it wants to help. Sovereign, which is involved in the same SBA program as First Citizens’, is the only bank providing technical assistance to the small businesses that felt an impact.

“Sovereign’s ability to provide this type of technical assistance is invaluable,” said Bill Leggiero, SBA’s area director for disaster assistance. “The faster we receive applications, the faster we can deliver the disaster relief and get these small businesses back on their feet again.”

According to Pat Sullivan, president and chief executive officer of Sovereign Bank in Massachusetts, the bank has received numerous inquiries from customers looking for assistance during the shellfish season. Those requests came mostly from fishermen and small businesses in the New Bedford and Rhode Island area.

Sovereign loan officers will assist small businesses in determining if they are eligible and help them apply for disaster assistance. Bank representatives will be set up in Sovereign’s Weymouth, Chatham, New Bedford and Gloucester branches for that purpose.

“The shellfishing industry is one of the most important, but also one of the most vulnerable, in Massachusetts,” said Sullivan. “Sovereign representatives are available to assist small businesses that have been hurt by this natural disaster. Our economic disaster relief team will help get help quickly to those small businesses that have been devastated by the red tide.”

Also providing help is Coastal Community Capital, a division of Cape and Islands Community Development Inc. Coastal Community, based in Centerville, provides loan capital to businesses with participation loans through traditional lenders, federal loan guarantees and direct lending.

Last week, the institution announced the creation of a $250,000 emergency loan fund to help the shellfish industry recover from the red tide disaster. Backing for the fund came from MassDevelopment, the state’s finance and development agency.

“We’ve had some experience in seafood industry financing and know that it’s important to get money out when it’s needed,” said Robert L. Culver, MassDevelopment’s president and chief executive officer. “We’ve worked with the group at Coastal Community Capital before, so we knew we could count on their help to reach the state’s aquaculture community.”

Fixed-rate, 4 percent loans are available to businesses or individuals involved in shellfish growing. The maximum loan is $25,000 with a maximum term of five years and interest only through May 2006.

Financial institutions have called the entire shellfish industry an important market for them. Sullivan said the bank took a proactive approach to help its customers because even when the red tide does disappear, the impacts will be felt thereafter.

“It’s going to take awhile to get normalcy in those fishing beds,” Sullivan said.

Jennifer Jope may be reached at jjope@thewarrengroup.com.