The Small Business Administration (SBA) announced on Tuesday that its disaster loan program has exhausted its funds. This announcement follows increased demand due to Hurricanes Helene and Milton. The SBA stated that the suspension of disaster assistance loans for small businesses, homeowners, and renters will remain effective until Congress allocates additional funding.
President Biden issued a statement encouraging Americans affected by recent disasters to continue applying for loans. He noted that Republican House Speaker Mike Johnson assured the program would be replenished once Congress reconvenes after the election. The SBA will process applications in the interim and distribute funds upon Congressional approval.
The SBA confirmed that its loan application portal is operational, and disaster centers and in-person staff remain active nationwide. The agency will continue accepting new applications and prepare borrowers to receive their loans promptly once Congress provides the necessary funds. The program currently requires approximately $1.6 billion for the fiscal year.
The SBA offers loans to businesses and individuals affected by disasters, including homeowners, renters, nonprofits, and businesses of all sizes. These loans are intended to provide immediate relief, helping businesses avoid bankruptcy. Government loans are crucial because, after a disaster, private lenders might hesitate to approve loans due to uncertainty. Other disaster relief programs, such as those from the Federal Emergency Management Agency (FEMA), are unaffected by the SBA’s funding shortage.
SBA Administrator Isabel Casillas Guzman stated that, while awaiting Congressional funding, the agency strongly encourages eligible businesses and households to apply for SBA disaster loans. The SBA will continue to support applicants with the processing of their applications to ensure timely assistance once funds are restored.
At present, the SBA is assisting qualified applicants across 173 disaster declarations. Applications currently in queue will receive loan offers once additional Congressional funding is secured and will be processed in the order they were received. During this period, the SBA will decline new applications that do not meet eligibility or underwriting criteria.
The SBA has reported approximately 37,000 relief applications submitted by those impacted by Hurricane Helene and over 12,000 related to Hurricane Milton. Borrowers with existing loan offers will continue to receive funds. The SBA can provide disaster loans up to $500,000 for homeowners to repair or replace damaged real estate, up to $100,000 for repairs or replacement of personal property for homeowners and renters, and up to $2 million for businesses for both physical damage and economic injury resulting from business disruption.
