Disaster relief hurricane loan program precariously low on funds
A federal program to help small businesses impacted by hurricanes and natural disasters now has enough funding for only a few more weeks without emergency intervention by Congress. Multiple Biden administration and congressional sources told CBS News there are concerns funding will be depleted by the end of this month.
The remaining pot of funding in the Small Business Administration's disaster loan fund is being severely strained by the damage of Hurricane Helene, CBS News has learned, and the Small Business Administration has received at least 3,000 applications every day since Hurricane Helene struck the Southeast. One administration official said there is not sufficient money to last until Congress' scheduled return to Washington after the November elections.
Congress failed to include additional funding for the disaster fund when it passed a short-term spending bill to fund the federal government in September. Although there is optimism that sufficient money remains to help offset the costs of the Federal Emergency Management Agency until Congress returns during the week of Nov. 12, there are growing concerns that the Small Business Administration disaster money will run dry.
In a memo to Republican congressional leaders Friday, President Biden said, "I warned the Congress of this potential shortfall even before Hurricane Helene landed on America's shores. I requested more funding for SBA multiple times over the past several months, and most recently, my Administration underscored that request as you prepared a continuing resolution to fund the Government. Now the need is even more urgent."
A spokesperson for Senate Majority Leader Chuck Schumer said he "is awaiting assessments from agencies working diligently on the ground."
Rep. Jared Moskowitz, a Florida Democrat who used to be a state emergency management official, told CBS News, "Congress should have been proactive on these issues of funding the Small Business Administration and FEMA before we went on a monthslong recess in the middle of hurricane season."
Moskowitz says he's introducing an emergency bill to boost funding for the Small Business Administration programs.
An aide to Sen. Rick Scott, a Florida Republican, told CBS News that Scott spoke with President Biden about the need for Congress to swiftly reconvene and approve new federal aid to respond to Helene's destruction.
"While I know from my experience with previous hurricanes that FEMA and SBA damage assessments take time, I am today urging Majority Leader Chuck Schumer to immediately reconvene the U.S. Senate when those assessments are completed so that we can pass the clean supplemental disaster funding bill and other disaster relief legislation," Scott said in a news release.
Small Business Administration disaster loans offer help for losses and damages that are not covered by other insurance. The agency says its loans cover damage to property including machinery, fixtures, inventory of products and equipment. Loan repayments are not required to begin in the first year after the loan is issued. Federal disaster loans are also interest free for the first year, and they carry no pre-payment penalties.
According to federal officials, in 2023, the SBA lent nearly $3 billion to disaster survivors nationwide — including over $670 million for small businesses and over $2.3 billion for homeowners and renters — to help them recover from the financial and physical impacts of manmade and natural disasters.
In a letter last week, a bipartisan group of senators from the hurricane-impacted states of Florida, Virginia, Georgia and North Carolina wrote, "This may even require Congress to come back in October to ensure we have enough time to enact legislation before the end of this calendar year."
A spokesman for House Speaker Mike Johnson, responding to questions from CBS News, referred to a comment Johnson made on "Fox News Sunday."
"We'll be back in session immediately after the election. That's 30 days from now," Johnson said. "The thing about these hurricanes and disasters of this magnitude is that it takes a while to calculate the actual damages, and the states are going need some time to do that."
Congress has previously approved some of its less-controversial measures without requiring the return of all of its members to Washington, D.C, including its effort to pass relief for Hurricane Katrina in 2005.
Editor's note: The Small Business Administration updated information provided to CBS News about its disaster relief loans. It lent $670 million to small businesses in 2023 for disaster relief, not $670,000.