The Small Business Administration Disaster Fund is out of money

Topline

Funds from the Small Business Administration’s disaster loan program have been depleted after two consecutive hurricanes, the government announced Tuesday, likely slowing recovery efforts – although people affected by Hurricanes Milton and Helene have been encouraged to continue applying for loans.

The Rocky Broad River flows into Lake Lure, flooding the town with debris from Chimney Rock. … [+] North Carolina after heavy rains caused by Hurricane Helene. Before the funding ran out, the SBA had approved more than 700 Hurricane Helene-related loans totaling about $48 million.

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Important facts

The SBA said in a news release that it had run out of funds and would suspend new direct loan offerings for disaster survivors until Congress appropriates additional funding — even though Congress is currently in recess until November.

The loan portal remains open despite the SBA’s lack of funding, and people and small businesses in disaster areas are encouraged to continue applying for loans as the agency will continue to process their applications.

President Joe Biden reiterated the SBA’s recommendation that people continue to apply for loans, saying in a statement that House Speaker Mike Johnson, R-La., “promised that this and other disaster programs will continue after Congress returns.” be refilled,” the Washington Post reported.

The SBA said that although there are no funds left, it may make “a small number of new loan offers during this time” from funds made available through loan cancellations.

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Big number

37,000. The SBA received that many applications for aid from people affected by Hurricane Helene alone. The SBA has granted Helene victims more than 700 loans totaling about $48 million. The administration said it received an additional 12,000 applications for people affected by Hurricane Milton.

Important background

SBA loans are long-term and have low interest rates. They are often used for things like clearing debris, replacing or repairing damaged property, or for businesses to cover economic losses from natural disasters. Federal agencies such as the SBA and the Federal Emergency Management Agency have warned that they could run out of funding shortly after Hurricane Helene devastated six southeastern states in late September. Helene, a Category 4 hurricane, made landfall in the Big Bend region of Florida on September 26 and moved through Georgia before hitting Tennessee and North Carolina, which sustained much of the damage. North Carolina continued to suffer for weeks after the storm, with several major highways still closed, about 120 people dead in the state and 92 people still missing, North Carolina Gov. Roy Cooper announced Tuesday. Just two weeks later, Hurricane Milton hit Florida, causing damage in parts of the state.

What you should pay attention to

If Congress reconvenes early to fund more disaster relief. Biden wrote to congressional leaders in early October, urging them to ensure disaster loan programs do not run out of funding during Congress’ recess, which runs through Nov. 12.