The Small Business Administration (SBA) has announced that its disaster loan program has run out of funding due to the high demand caused by constant extreme weather disasters. President Joe Biden has called the program a critical lifeline for small businesses, homeowners, and renters affected by disasters. The depletion of the SBA’s disaster fund may force Congress to address the situation with disaster relief funding when lawmakers return to Capitol Hill in November. Speaker Johnson has promised to replenish this and other disaster programs when Congress reconvenes, urging Americans to continue applying for these loans.
While the SBA’s disaster fund has run out of money, the Federal Emergency Management Agency’s (FEMA) disaster relief fund is still at $8.5 billion as of Tuesday. The SBA has announced that it will pause new offers for its direct and low-interest long-term loans to disaster survivors until Congress approves more money for the fund. However, small business owners impacted by recent hurricanes are encouraged to continue applying for relief. Administrator Isabel Casillas Guzman has stated that the SBA will continue to process applications and support homeowners, renters, businesses, and nonprofits in processing their applications to ensure they receive assistance quickly once funds are replenished.
The balance of the SBA’s fund has been continuously decreasing as a result of responding to hurricanes Helene and Milton. FEMA, on the other hand, has sufficient funding to continue response and recovery efforts for these hurricanes. The agency recently received around $20 billion from Congress to respond to hurricane season, with about $11.5 billion of the Disaster Relief Fund already spent in just two weeks. The rapid spend rate reflects the numerous disasters that have struck the US throughout the summer before Helene and Milton made landfall.
The SBA has received around 37,000 applications for relief from those impacted by Hurricane Helene and has already made over 700 loan offers totaling approximately $48 million. Additionally, the SBA has received over 12,000 applications from Hurricane Milton survivors. Despite the fund running out of money, the SBA is urging eligible businesses and households to continue applying for disaster loans while they await Congress to provide the necessary funding. The agency emphasizes its commitment to supporting individuals and businesses in processing their applications efficiently and ensuring they receive assistance once funds are replenished.
