The US Small Business Administration (SBA), a federal agency, said this week it has no money left for disaster loans after two destructive hurricanes, Helene and Milton, ripped through southeastern US states inside a three-week period from 26 September.
With more than 40,000 loan applications from businesses and householders pending, SBA said on Tuesday (15 October) that it had “exhausted funds” for its direct, low-interest, long-term loans because of demand following Helene alone.
It needs Congress to appropriate more money, but Congress went into recess on 28 September ahead of the 5 November election and is not scheduled to reconvene until 12 November.
SBA is still encouraging people and businesses to apply for loans, saying it has had “assurances from congressional leaders” that extra funding will be provided when Congress returns.
‘I warned of this’
On 4 October, President Joe Biden wrote to House Speaker Mike Johnson and other congressional leaders urging them to appropriate funds for the SBA immediately.
“I warned the Congress of this potential shortfall even before Hurricane Helene landed on America’s shores,” he wrote, adding that he “requested more funding for SBA multiple times over the past several months”.
SBA can make disaster loans up to $500,000 to homeowners to repair or replace damaged property.
Homeowners and renters may be eligible for up to $100,000 to repair or replace personal property.
Businesses may be eligible for loans up to $2m for both physical damage and economic injury from business disruption.
Interest rates are as low as 4% for businesses, 3.25% for nonprofit organisations, and 2.813% for homeowners and renters, without credit elsewhere, and terms are up to 30 years.
$48m so far
SBA said it has had 37,000 applications for relief relating to Hurricane Helene alone. It has already offered 700 Helene loans totaling $48m.
For Hurricane Milton, SBA has so far received around 12,000 applications.
The agency said those who already have a loan offer will continue getting disbursements.
It said disaster survivors should “start the application process immediately, regardless of SBA funding availability” so it can take applicants through the vetting process.
“We know that swift financial relief can help communities recover quickly to stabilise local economies,” said Administrator Isabel Casillas Guzman.
“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.”
- Subscribe here to get stories about construction around the world in your inbox three times a week
