October 8, 2024 — Officials from the Small Business Administration (SBA) issued a stark warning on Tuesday, indicating that the agency is nearing the end of its available funding for disaster loans designed to support homeowners and businesses impacted by recent natural disasters. With less than $100 million remaining, the agency faces challenges in providing timely assistance as Hurricane Milton approaches Florida, and the effects of Hurricane Helene continue to affect several Southeastern states.
SBA Administrator Isabel Guzman expressed concern that the agency would soon exhaust its funds for new loans. While the SBA will still process applications after the funds are depleted, any new loan approvals will require congressional action to secure additional funding. “Our ability to fully support all of our disasters is going to be diminished, and that includes Milton,” Guzman said in a Tuesday evening interview.
The situation is particularly urgent as federal and state officials prepare for the imminent impact of Hurricane Milton, which is forecasted to be the strongest storm to strike the Gulf of Mexico since 2005. As preparations are underway, the remnants of Hurricane Helene have already wreaked havoc across various states, complicating recovery efforts.
Guzman noted that the depletion of funds could significantly delay recovery efforts for families and businesses, hampering their ability to rebuild homes and restore operations. “This could delay a family’s ability to rebuild their home and get back in safely, or a business owner’s ability to quickly clean up and get their employees back to work,” she added.
In a letter to congressional leaders, President Biden underscored the need for immediate action to restore funding, stressing the critical nature of ensuring that major disaster programs do not lapse during the upcoming congressional recess. While the letter did not specify a funding amount or explicitly call for lawmakers to return early, Biden emphasized the urgency of the situation.
Currently, Congress is scheduled to reconvene on November 12, but it remains uncertain whether lawmakers will act to replenish the SBA’s disaster loan funds prior to that date. Speaker of the House Mike Johnson has indicated that the House would return after the elections, with no plans for an earlier session to address additional disaster relief funding.
“This is a really, really important engine of recovery, and it could be quite devastating,” remarked Jeffrey Schlegelmilch, director of the National Center for Disaster Preparedness at Columbia University, regarding the potential consequences of a funding shortfall.
In response to the escalating crisis, Representative Jared Moskowitz, a Florida Democrat, introduced legislation aimed at providing the SBA with billions in additional funding to support relief efforts related to Hurricanes Helene and Milton. Moskowitz criticized Congress for not proactively funding the SBA and FEMA prior to the lengthy recess during hurricane season.
The SBA has formally requested $1.6 billion from Congress to bolster its disaster loan program for the fiscal year, with Guzman indicating that even more may be needed in light of Hurricane Milton. In 2023, the agency issued nearly $3 billion in loans, aiding businesses and homeowners as they recovered from various disasters.
While President Biden acknowledged that the Federal Emergency Management Agency (FEMA) has sufficient funds for immediate emergency responses, he cautioned that FEMA would face a shortfall by year-end without additional congressional resources. “Without additional funding, FEMA would be required to forgo longer-term recovery activities in favor of meeting urgent needs,” he stated.
The administration has been advocating for extra disaster relief funds following various natural disasters, including fires in Hawaii and tornadoes across several states. The urgency of the situation calls for swift action from Congress to ensure that affected communities receive the support they need to recover and rebuild.
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