The recent spate of hurricanes hammering the south of the United States has caused so much damage that an organization that provides loans to help people rebuild has literally run out of money.
At a glance:
- The Small Business Administration (SBA) has run out of funds for disaster assistance loans, delaying relief for those affected by Hurricanes Helene and Milton.
- The SBA has received 37,000 applications for aid related to Hurricane Helene and 12,000 for Hurricane Milton, but new loans are paused until Congress approves more funding.
- Other aid programs, like those from FEMA, remain unaffected for now, though future funding may be needed.
The Small Business Administration (SBA) has exhausted its funds for the disaster assistance loans it provides to small businesses, homeowners, and renters impacted by natural disasters. This shortage comes at a critical time, as thousands of people are applying for aid in the wake of Hurricanes Helene and Milton, which caused widespread damage across multiple states. The SBA has warned for weeks that it could run out of money due to the anticipated surge in claims, and now, applicants may face significant delays.
As of now, the SBA has received around 37,000 applications from those affected by Hurricane Helene and made 700 loan offers totaling $48 million. In addition, 12,000 applications have been submitted from those affected by Hurricane Milton. However, without additional funding, the SBA is unable to issue any new loan offers until Congress reconvenes on November 12 and potentially approves more funds.
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The SBA’s disaster loan program plays a crucial role in helping communities recover from devastating events. It offers two types of loans: Business Physical Disaster Loans, which cover repairs to disaster-damaged property, and Economic Injury Disaster Loans, which provide working capital to small businesses struggling to meet financial obligations due to a disaster. These loans can be as large as $2 million, with interest rates as low as 4% for businesses and 3.25% for non-profit organizations. Homeowners are also eligible for up to $500,000 in loans to repair or replace damaged property, while renters can receive up to $100,000 to repair personal property.
SBA Administrator Isabel Casillas Guzman encouraged applicants to continue applying for assistance despite the funding shortage, stating that the agency is working to process applications so funds can be quickly disbursed when available. She acknowledged the importance of swift financial relief to stabilize local economies and help communities recover.
While the SBA program faces funding challenges, other government aid programs, such as those offered by the Federal Emergency Management Agency (FEMA), are still operational. FEMA has assured the public that its disaster relief fund is currently sufficient to respond to Hurricanes Helene and Milton. However, FEMA Administrator Deanne Criswell has warned that the agency may need supplemental funding from Congress in the future. Without this, FEMA may have to enter “immediate needs funding,” which would limit payouts for past disasters in favor of focusing resources on immediate life-saving missions during new disasters.
For those seeking more information about government aid programs, the official disaster assistance website provides resources and updates on available services.
This situation highlights the pressing need for Congress to address the funding gap to ensure small businesses and individuals affected by natural disasters receive the support they need.