Hurricane relief efforts are running out of money

Initial estimates of the damage are between $50 billion and $100 billion. | Photo: Shutterstock

The US Small Business Administration (SBA) will run out of money in just a few days to provide loans to restaurants and other small businesses struggling to recover from hurricanes Helene and Milton, agency chief Isabel Guzman warned members of Congress last week.

The potential shortfall came to light as Florida restaurants assessed the impact of Hurricane Milton, the powerful storm that hit the state last week. First Watch, the local breakfast and lunch chain, announced today that 85 company-owned restaurants were closed for at least one day following Hurricane Milton and eight remain closed. According to Helene, ten company units were closed for at least a day.

The recovery in Florida and several states north of it continues to be supported by the Federal Emergency Management Agency (FEMA). This agency says it has sufficient resources to continue supporting these areas, but acknowledges that it is out of the $20 billion that Congress had specifically allocated for emergency relief for the fiscal year beginning October 1, 2024 , has already burned $9 billion dollars donated to FEMA to prepare the Southeast for Hurricane Helene.

FEMA Administrator Deanne Criswell warned Friday that the agency may have to withhold aid in future disasters unless Congress increases its funding. Meteorologists are already monitoring a storm system in the Atlantic that the National Hurricane Center gives a 40 percent chance of becoming a hurricane.

The SBA’s resources may be depleted in the midst of its efforts to help Florida small businesses resume operations, Guzman said in a letter obtained by The Washington Post. The agency’s loan pool has reportedly dropped to $50 million.

House Speaker Michael Johnson has vowed publicly that Congress will not leave the recovery effort unfunded. However, he said Sunday that he would not recall the House of Representatives before the Nov. 5 election, arguing that the federal government may not know beforehand exactly how much additional money might be needed.

President Biden has urged the Louisiana Republican not to wait until then, arguing that aid is needed now.

Appearing on CBS’s “Face the Nation” Sunday, Johnson refuted Criswell’s warning about FEMA’s resources. He claimed that the agency had spent only 2% of the $9 billion allocated to it for hurricane relief and that it should be able to continue its relief efforts in the Southeast.

“We need FEMA to do their job,” Johnson said during the broadcast.

The SBA supports small businesses by lending capital at attractive rates through a network of local banks and other institutions. These institutions have the assurance that the SBA will repay the loans if the borrower defaults.

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Peter Romeo has been reporting on the restaurant industry for various media since 1984. As managing editor covering the restaurant industry, his current topics include government affairs, work and family dinners. He is also the publication’s unofficial historian.

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