With severe floods crippling parts of the Midwest, the federal government this week implemented new provisions that boost emergency loans and other benefits aimed at helping small businesses recover from a disaster.

The increased benefits, which include raising the emergency loan cap by $500,000 to $2 million, are part of the Small Business Disaster Response and Loan Improvement Act contained in the 2008 Farm Bill, and recently signed into law by President Bush. Other changes include higher unsecured loan limits, which were raised from $10,000 to $14,000.

The new provisions are the latest in a series of attempts to improve the federal government's disaster aid for smaller businesses, which is overseen by the Small Business Administration. The recent flooding in Iowa, Indiana, Wisconsin and other states is one of the biggest disasters the agency has faced since being widely criticized for mishandling recovery efforts in the wake of Hurricane Katrina in 2005.

"Midwest residents whose home and businesses have been destroyed or damaged by severe flooding will have enhanced support through the SBA to help recover due to the new provisions," Jovita Carranza, the agency's acting administrator, said in a statement.

Carranza said the changes will make the recovery process more manageable for small-business owners by helping to alleviate the financial burden of rebuilding.

"I encourage disaster victims to use the resources and counseling of SBA to help them during this very difficult time,” said Carranza, who toured the flooded regions earlier this week.

The agency's low-interest loans are available for homeowners, renters, businesses, private and non-profit organizations whose property was destroyed within an officially declared disaster area.