Small Business Administration Depletes Disaster Loan Funds

WASHINGTON — The Small Business Administration has run out of funds to provide low-interest loans to homeowners and businesses to repair property damaged by disasters, the Biden administration said Tuesday.

The drawdown of funds comes as residents across the southeast are still recovering from the destructive impacts of hurricanes Milton and Helene. Federal officials urged eligible people to continue to apply for loans, which they would continue to process while they wait for lawmakers to pass “much-needed funding.” But Congress is not set to reconvene until Nov. 12, and congressional leaders have not committed to calling members back sooner to approve more funding for the SBA or the Federal Emergency Management Agency.

“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,” President Joe Biden said in a statement, referring to Speaker Mike Johnson.

Isabel Guzman, the agency’s administrator, warned last week that the SBA would soon run out of funds, and she called on lawmakers to return to Washington to approve more money.

Johnson said that federal officials had enough disaster funding to address the immediate needs of Americans in hurricane-affected areas. He has pointed to the additional $20 billion that Congress recently approved for FEMA’s disaster relief fund.

FEMA officials have said they have enough money for the immediate recovery needs of people affected by Hurricane Milton. But they have said that they will have to evaluate how quickly they are burning through funding. Alejandro Mayorkas, the homeland security secretary, has also warned that FEMA might not have enough funding to make it through the rest of the hurricane season.

“There’s no question these devastating back-to-back storms have stressed the SBA funding program,” Johnson said in a statement. “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.”

Some lawmakers have urged Congress to return to Washington sooner. Last week, more than 60 House Democrats signed a letter urging Johnson to bring the House back into session to approve more disaster relief funding for the SBA and FEMA.

This article originally appeared in The New York Times .