SBA's Disaster Loan Program Runs Out Of Money As Hurricanes Drive Demand
Authored by Katabella Roberts via The Epoch Times,
The Small Business Administration’s (SBA) disaster assistance loan program is out of money after hurricanes Helene and Milton struck parts of the United States, the agency has announced.
In an Oct. 15 press release, the SBA said funds for the program have been exhausted following increased demand from disaster survivors in the wake of multiple extreme weather events, including the two hurricanes that made landfall in September and October.
The agency will therefore be pausing new loan offers for its direct, low-interest, long-term loans to disaster survivors.
The SBA encouraged individuals and small businesses to continue applying for loans, citing assurances from congressional leaders that additional funding will be provided once they return to Capitol Hill in November.
The agency’s loan application portal will also remain open, while its disaster centers and in-person staff will continue to be deployed across the country, the press release said.
“The agency will continue to accept new applications and ready borrowers to get their disaster loan offers as soon as possible once Congress appropriates funds,” the SBA stated.
Additionally, the SBA noted it may continue to make a “small number of new loan offers during this time,” using funds made available through loan cancellations and similar actions.
The SBA was created in 1953 and offers low-interest loans to businesses, homeowners, renters, and private nonprofit organizations to help them recover from federally declared disasters.
Thousands Seek Relief Funds
Through its loan program, homeowners can receive up to $500,000 to replace or repair their primary residence, while businesses and private nonprofit organizations can get up to $2 million to cover disaster-related physical damage and economic injuries that aren’t fully covered by insurance.
In a statement, SBA Administrator Isabel Casillas Guzman stressed the importance of getting swift financial relief to communities, noting it helps in both recovery efforts and stabilizing local economies.
“While we await Congress to provide much-needed funding, we strongly encourage eligible businesses and households to apply for SBA disaster loans,” Guzman said.
“SBA will continue to support homeowners, renters, businesses, and nonprofits in processing their applications to ensure they receive assistance quickly once funds are replenished,” she added.
The latest announcement from the SBA comes after President Joe Biden warned lawmakers this month that the agency’s disaster loan program was set to run out of funding “in a matter of weeks” and well before Congress plans to reconvene in November.
Biden urged lawmakers to act immediately to replenish the disaster loan program, although he stopped short of stating exactly how much money the program needs.
It comes amid recovery efforts from hurricanes Helene and Milton, the latter of which Biden said has caused around $50 billion worth of damage.
In its latest press release, the SBA said it has received around 37,000 applications from those impacted by Helene, and has made over 700 Helene loan offers totaling about $48 million.
For Milton, the agency has already received over 12,000 applications, it said.
“Importantly, despite this funding lapse, borrowers who already have a loan offer will continue to receive disbursements, and borrowers who already have existing loans may continue with servicing actions and loan modifications,” the agency said.