MOUNT DESERT – The U.S. Small Business Administration has granted a request from the state to make up to $2 million in federal disaster loans available to businesses affected by a July fire in downtown Northeast Harbor.

Gov. John Baldacci announced the federal declaration Monday in a press release.

The loans have a maximum interest rate of 4 percent and may be used to cover normal operating expenses through the disaster recovery period, according to the release. Maine Emergency Management Agency and USSBA will work with the affected businesses to implement the disaster aid.

The early morning fire broke out on July 29, destroying three buildings and displacing nearly two dozen people who lived in apartments above street level along Northeast Harbor’s Main Street. The Colonel’s Bakery and Deli, Wingspread Gallery and the Joy Building all were lost to the flames.

Mark Reece, who owns Colonel’s with his wife, Stephanie, said Monday that they already have poured a new foundation for their building and hope to have enough done that they can reopen by the end of June 2009, if not before. He said he’ll consider applying for the disaster funds and that he hopes some of his neighbors who lost their buildings will be able to take advantage of them.

“I think this is great news,” Reece said. “[It should] help get Main Street back to the way it should be.”

Baldacci wrote in the release that the purpose of the disaster loans is to make that goal a reality.

“While the loss was great, the economic injury disaster loans will help those who were affected have the chance to reopen and get back to work as quickly as possible,” Baldacci wrote in the release.

btrotter@bangordailynews.net

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