President Joe Biden announced that the Small Business Administration (SBA) has run out of funds to provide disaster recovery loans to individuals and businesses affected by Hurricanes Helene and Milton. The SBA has temporarily paused new loan offers through its disaster program due to the exhaustion of funds. This has left many people and businesses in the Southeast struggling to rebuild after the devastating hurricanes.
The SBA has received 49,000 applications from households and businesses impacted by the hurricanes, but only 700 loans, totaling $48 million, have been approved. SBA Administrator Isabel Casillas Guzman has encouraged those in affected areas to continue applying for disaster loans, assuring that funds will be provided once Congress appropriates them.
The pause in loan offers could delay the rebuilding process for many individuals and businesses who rely on SBA loans to start the reconstruction. Without this financial assistance, businesses, restaurants, and other establishments that have suffered damages and lack insurance will face challenges in getting back on their feet.
Ben Collier, an associate professor of Risk Management and Insurance at Temple University, emphasized the importance of SBA disaster loans in helping households avoid bankruptcy when faced with significant rebuilding costs. The loans provided by SBA have been crucial in aiding homeowners, renters, and small businesses in recovering from natural disasters.
House Speaker Mike Johnson acknowledged the strain on the SBA funding program caused by the consecutive hurricanes but stated that the necessary disaster funding is available to address the immediate needs of the affected individuals. He assured that Congress is closely monitoring the situation and will provide bipartisan support to allocate the required funds once members return to session.
As the SBA faces financial struggles, there are concerns about the potential impact on FEMA’s ability to provide disaster aid. FEMA’s funds are also dwindling, and without additional money from Congress, the agency may have to restrict aid in the near future. While FEMA offers emergency assistance for minor home repairs, SBA loans are essential for permanent repairs and rebuilding efforts.
The SBA has requested $1.6 billion from Congress to continue its disaster loan program, but the temporary budget approved in September did not include supplemental funding for this purpose. The combined damage from Hurricanes Helene and Milton is estimated to be as high as $250 billion, highlighting the urgent need for financial support to assist those affected by the disasters.
In conclusion, the depletion of funds for disaster recovery loans by the SBA underscores the critical need for immediate action from Congress to allocate additional funding. The delays in providing financial assistance to individuals and businesses impacted by the hurricanes could prolong the recovery process and hinder the rebuilding efforts in the affected regions. It is essential for lawmakers to prioritize disaster funding to ensure that communities can recover and rebuild in the aftermath of natural disasters.