By Madeleine Ngo
The Small Business Administration has exhausted its funding to issue low-interest loans to homeowners and businesses for repairing properties harmed by disasters, the Biden administration announced on Tuesday.
This funding depletion occurs while residents across the southeastern U.S. continue to recover from the severe consequences of hurricanes Milton and Helene. Federal officials encouraged qualified individuals to persist in applying for loans, which they would keep processing while awaiting congressional action on “essential funding.” However, Congress is not scheduled to reconvene until November 12, and there has been no commitment from congressional leaders to bring members back sooner to authorize additional funding for the SBA or the Federal Emergency Management Agency.
“Speaker Johnson has assured that this and other disaster programs will be replenished upon Congress’s return, so Americans are encouraged to keep applying for these loans,” President Joe Biden stated regarding Speaker Mike Johnson. “SBA will keep accepting applications and will distribute loans as soon as Congress provides the necessary funds.”
Isabel Guzman, the agency’s administrator, cautioned last week that the SBA would soon deplete its funds and urged lawmakers to return to Washington to approve additional funding. Earlier this month, Biden also called on Congress to “restore this funding.”
Johnson indicated that federal officials possess sufficient disaster funding to meet the immediate needs of those impacted by hurricanes. He highlighted the $20 billion recently allocated by Congress for FEMA’s disaster relief fund.
FEMA officials stated they have enough resources for the immediate recovery needs of individuals affected by Hurricane Milton but emphasized the necessity of monitoring how quickly they are expending their funding. Alejandro N. Mayorkas, the Secretary of Homeland Security, has also expressed concerns that FEMA may lack adequate funding to last through the remainder of the hurricane season.
“There’s no doubt these catastrophic consecutive storms have taxed the SBA funding program,” Johnson noted in a statement. “Congress is closely monitoring this situation, and when members reconvene in just a few weeks, the administration should have a precise assessment of the actual amount required, garnering strong bipartisan backing to secure the necessary funding.”
A spokesperson for Senator Chuck Schumer of New York, the majority leader, mentioned last week that he was also awaiting estimates from agencies on the ground.
Some legislators have pressed for an earlier return to Washington. Recently, more than 60 House Democrats signed a letter urging Johnson to reconvene the House to approve additional disaster relief funding for the SBA and FEMA.
The SBA provides low-interest loans to homeowners, renters, businesses, and nonprofits whose properties have suffered damage due to disasters. Homeowners may secure loans up to $500,000 for repairs or replacements of damaged or destroyed real estate. Both homeowners and renters are eligible for up to $100,000 to restore or replace personal belongings. Businesses can obtain loans of up to $2 million.
To date, the SBA has issued over 700 loan offers totaling around $48 million and has received approximately 37,000 applications from individuals affected by Hurricane Helene. The agency has also garnered more than 12,000 applications from those impacted by Hurricane Milton.
The agency could continue to extend a limited number of new loan offers if funds become available through loan cancellations, according to agency representatives.
The SBA has sought $1.6 billion in new funding from Congress for its disaster loan program for the complete fiscal year, although agency leaders have indicated that they will likely require more after Hurricane Milton. In 2023, the SBA provided nearly $3 billion in loans—including over $670 million for businesses and more than $2.3 billion for homeowners and renters—to assist individuals in recovering from disasters.
