() – The Small Business Administration’s (SBA) disaster loan program has run out of funds due to high demand caused by ongoing extreme weather disasters, the administration announced Tuesday.
In a statement, President Joe Biden called the SBA’s depleted disaster loan program “a crucial lifeline for small businesses, homeowners and renters affected by disasters.”
This SBA disaster fund situation could force Congress to address the dire situation with disaster relief funds when lawmakers return to Capitol Hill in November.
“House Speaker Johnson promised that this and other disaster programs will be replenished when Congress returns, so Americans should continue to apply for these loans,” Biden said in a statement, adding that the SBA “will continue to process applications and will disburse loans as soon as Congress provides the necessary funds.”
The SBA fund is different from the Federal Emergency Management Agency (FEMA) disaster relief fund, which provides assistance to people affected by hurricanes. The FEMA fund amounts to $8.5 billion as of Tuesday, a FEMA spokesperson told .
The SBA will pause new offerings for its already low-interest, long-term direct loans for disaster survivors until Congress approves more money for the fund, according to a news release. However, he encourages small business owners affected by Helene and Milton to continue applying for help.
“While we wait for Congress to provide much-needed funding, we strongly encourage eligible businesses and households to apply for SBA disaster loans,” Administrator Isabel Casillas Guzmán said in a statement. “The SBA will continue to support homeowners, renters, businesses and nonprofit organizations in processing their applications to ensure they receive assistance quickly once funds are replenished.”
The fund balance continually declined as the agency responded to back-to-back powerful hurricanes Helene and Milton. The spokesperson reiterated that FEMA has the necessary funds “to continue response and recovery efforts” for both hurricanes.
After receiving an injection of about $20 billion from Congress to respond to the hurricane season, FEMA has spent about $11.5 billion from its Disaster Relief Fund in about two weeks. It had spent $9 billion before Milton made landfall in Florida last week. A significant portion of the money already spent went to reimburse other states for previous disasters, which FEMA was able to do after exiting immediate needs funds on October 1.
This rapid rate of spending reflects how many disasters have hit the United States over the summer, to which the agency is still responding, before Helene and Milton made landfall.
The SBA has received approximately 37,000 requests for assistance from those affected by Hurricane Helene and has already made more than 700 Helene loan offers totaling approximately $48 million. The SBA has received more than 12,000 additional applications from Hurricane Milton survivors.
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