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President Biden is calling on Congress to take action after confirming that the Small Business Administration’s (SBA) disaster loan program has exhausted its funds.
What’s the deal: According to President Biden, the SBA disaster loan program ran out of funds due to heightened demand following back-to-back hurricanes. Officials estimate that the program requires an additional $1.6 billion to meet the increased demand for disaster relief, particularly after the impact of Hurricane Helene. While Congress recently passed a temporary funding measure, it did not include additional funding for the SBA, and the Biden administration has not yet submitted a new emergency supplemental funding request.
What Biden is saying: In a statement, President Biden said, “Speaker Johnson has promised that this and other disaster programs will be replenished when Congress returns, so Americans should continue to apply for these loans. SBA will continue to process applications and will disburse loans as soon as Congress provides the needed funding.”
What Speaker Johnson is saying: In a statement, Speaker Johnson said the Biden administration “has the necessary disaster funding right now to address the immediate needs of American people in these hurricane-affected areas.” He added, “Congress is tracking this situation closely, and when members return in just a few short weeks, the administration should have an accurate assessment of the actual dollar amount needed and there will be strong bipartisan support to provide the necessary funding.
How an SBA disaster loan works: SBA disaster loans provide low-interest financial assistance to businesses and nonprofits affected by declared disasters. These loans help cover repair or replacement costs for damaged property, equipment, inventory, and other essentials. Businesses can apply for up to $2 million to cover physical and economic damage. The interest rates for these loans are typically lower than market rates—often as low as 3% for businesses and 1.5% for homeowners and renters, depending on their creditworthiness. Loan repayment terms can extend up to 30 years, based on the borrower’s ability to pay, making them an affordable way to recover from disaster-related financial strain.
