The Small Business Administration (SBA) has announced that its disaster loan program has run out of funding due to overwhelming demand caused by a series of extreme weather events. This declaration was made public on Tuesday.
In a statement, President Joe Biden referred to the SBA’s disaster loan program as “a critical lifeline to small businesses, homeowners, and renters affected by disasters.” The depletion of funds has raised concerns that Congress will need to step in to address the urgent situation regarding disaster relief funding when lawmakers reconvene in November.
Biden emphasized the urgency of the situation, stating, “Speaker Johnson has promised that this and other disaster programs will be replenished when Congress returns, so Americans should continue to apply for these loans.” He assured that the SBA would keep processing applications and disburse loans as soon as the necessary funding is available.
It’s important to note that the SBA’s disaster fund is separate from the Federal Emergency Management Agency (FEMA)’s disaster relief fund, which is designated for individual assistance following hurricanes. As of Tuesday, FEMA’s disaster relief fund has a balance of $8.5 billion, according to a FEMA spokesperson.
The SBA has announced a temporary pause on new offers for direct and low-interest long-term loans for disaster survivors until Congress approves additional funding for the program. However, the SBA is encouraging small business owners affected by Hurricanes Helene and Milton to continue submitting their applications for relief.
“While we await Congress to provide much-needed funding, we strongly encourage eligible businesses and households to apply for SBA disaster loans,” said SBA Administrator Isabel Casillas Guzman. She added that the SBA remains committed to supporting homeowners, renters, businesses, and nonprofits by processing their applications swiftly to ensure assistance is available as soon as funds are replenished.
The depletion of the SBA fund is attributed to the continuous response required for Hurricanes Helene and Milton. To date, the SBA has received approximately 37,000 applications for relief from Hurricane Helene, with over 700 loan offers totaling around $48 million already extended. Additionally, more than 12,000 applications have been received from survivors of Hurricane Milton.
FEMA has reported a rapid spending rate from its disaster relief fund, having spent approximately $11.5 billion in just two weeks since receiving an infusion of around $20 billion from Congress to address the hurricane season. The agency’s expenditures include reimbursements to various states for previous disasters, utilizing funds released from immediate needs as of October 1.
As the SBA navigates this challenging landscape, the pressing need for effective disaster relief funding remains at the forefront of discussions among lawmakers and affected communities.
Related Topic:
UK Investment Summit to Showcase International Business Opportunities
Reeves Signals Hike in National Insurance for Firms
Supply Chain Leaders Predict Business Growth in Next 12 Months
