Small Business Administration Disaster Program Depleted After Hurricanes Helene and Milton
After the heavy toll taken by Hurricanes Helene and Milton, the Small Business Administration (SBA) has announced it has run out of funds for its disaster loan program, creating uncertainty for countless families and businesses trying to recover. The administration reported this depletion on Tuesday, following the relentless surge of applications from those affected.
President Joe Biden labeled the SBA’s disaster loan program as “a lifeline to small businesses, homeowners, and renters affected by disasters,” emphasizing its importance during times of crisis. He urged the public to continue submitting applications, assuring them of future support once Congress returns to address this dire situation.
The SBA's disaster fund was substantially drained after hurricanes caused widespread damage, leading to more than 37,000 loan applications related to Hurricane Helene, which alone generated nearly $48 million worth of loans prior to the depletion. Following Helene, which struck primarily the southeastern states, another wave of applications came pouring in after Hurricane Milton made landfall shortly after.
"The need is enormous, and we couldn’t anticipate the scale of the destruction these hurricanes caused," remarked SBA Administrator Isabel Casillas Guzman. While the agency has paused new loan offers, they will continue processing applications, insisting eligible businesses and households should proceed with their paperwork, ensuring they remain prepared when funding is restored.
Congress is currently on recess and is scheduled to reconvene on November 12. Until then, it remains unclear when additional funding for the program will be approved. Secretary Guzman noted potential support could come through the cancellation of existing loans, which may enable small amounts of new loan offers even during this funding pause.
Although the SBA's loan fund is exhausted, FEMA (Federal Emergency Management Agency) remains operational, with sufficient funding to support immediate needs for disaster recovery. FEMA has approximately $8.5 billion at its disposal, which is distinct from the SBA’s allocation. FEMA focuses on both emergency relief for individuals and broader recovery operations following disasters.
Biden and Guzman have assured the public they are pressing Congress to replenish the disaster relief funds swiftly. "Our recovery efforts cannot afford delays; thousands are still reeling from the devastation," Biden stated, underscoring the urgency for legislative action. Speaker Mike Johnson (R-LA) stated they are tracking the needs closely and reiterated his commitment to support funding to replenish the SBA upon reconvening.
The need is underscored by the severity of damages inflicted by Hurricane Helene, which resulted not only in substantial economic losses but also took lives, leaving more than 90 people still unaccounted for weeks after its passing. This stark reality highlights the need for immediate attention to disaster recovery funds, which have only dwindled due to overwhelming application volumes and the more recent onslaught of Hurricane Milton.
This outpouring of applications signifies society’s reliance on these funds—essential for businesses and residences alike affected by natural disasters. The SBA’s Economic Injury Disaster Loans (EIDL) provide financial relief to cover expenses not met by insurance, including property repair, replacements, and operating costs during recovery.
The path forward for the SBA, as noted, hinges on direct congressional action soon after the elections. It’s clear Congress has a role to play not only to replenish the SBA’s disaster fund but also to avoid putting affected individuals and businesses at greater risk as they continue to recover from hurricanes’ aftermath.
Meanwhile, the SBA is maintaining its commitment to at least start processing the existing influx of applications, which will speed up disbursement once funding is restored, offering eligible individuals hope amid uncertainty. "We are committed to supporting our small business owners, homeowners, and renters throughout this recovery process," Guzman said.
All eyes now turn to DC as discussions about disaster relief funding continue, hoping for swift legislative action to support those still reeling from the storms. While the SBA may be temporarily halted, the collective hope remains strong, and the drive for recovery persists across affected communities.
