Summary
The U.S. Small Business Administration (SBA) announced that its disaster loan program has officially exhausted its funds, largely due to the overwhelming impact of Hurricane Helene and Milton. Despite the halt, small businesses have reason to remain hopeful. The SBA remains committed to supporting small businesses through this challenging period.
Administrator Isabel Casillas Guzman has said, “We know that swift financial relief can help communities recover quickly to stabilize local economies,”. “While we await Congress to provide much-needed funding, we strongly encourage eligible businesses and households to apply for SBA disaster loans. SBA will continue to support homeowners, renters, businesses, and nonprofits in processing their applications to ensure they receive assistance quickly once funds are replenished.”
Small Business Disaster Funds: Resilience Through Preparation
Hurricane Helene, one of the most destructive storms of 2024, triggered a wave of loan applications from affected small businesses and homeowners seeking financial relief. The SBA typically provides low-interest disaster loans, which is a crucial resource for covering property damage, repair, and rebuilding efforts for those hit by natural disasters.
SBA loans offer small businesses a way to avoid costly bridge loans or high-interest credit cards. Eligible businesses can receive up to $2 million in funding to cover both physical damages and losses from business disruptions, providing critical financial support without the burden of predatory lending.
With more than 37,000 applications submitted and 700 Helene loan offers, totaling about $48 million, being made, the unprecedented demand outstripped the available budget, leaving the SBA unable to disburse new loans. SBA officials have reassured applicants that while processing continues, no additional loan offers will be made until Congress allocates new funds.
While the exhaustion of funds has left many in limbo, the SBA has called on Congress to urgently pass a new funding package, stressing the importance of prompt action to ensure the continuity of disaster relief services.
Small Business Disaster Funds: Resilience Through Preparation
President Biden has consistently expressed support for small businesses, particularly during crises. After the recent natural calamities, he urged Congress to allocate more funds to the SBA disaster loan program to ensure quick recovery for small businesses. He has called on Congress to “step up” and start processing the relief funding “particularly for small businesses.”
While waiting for additional disaster loan funding, small businesses can take proactive steps to bolster resilience. Reviewing disaster preparedness plans, exploring temporary relief resources, and staying updated on SBA announcements can help ease the transition until federal relief resumes. The SBA’s commitment to serving disaster-stricken communities stands firm, and once Congress provides more funding, businesses will be able to receive the support they need for a swift comeback.
