The federal program to assist small businesses impacted by hurricanes and natural disasters is running out of funds, with only $1.6 billion remaining. The funding is expected to be depleted by the end of the month unless Congress takes emergency action. The Small Business Administration’s disaster loan fund has been strained by the recent damage caused by Hurricane Helene, with thousands of applications being submitted daily since the disaster.
President Biden has alerted Congress to the potential shortfall in funding and has requested additional funds for the Small Business Administration multiple times. Despite optimism that there is enough money to cover FEMA costs until Congress returns after the November elections, concerns are growing that the disaster fund will not last. Multiple officials are urging Congress to reconvene and approve new federal aid to address the destruction caused by Hurricane Helene.
Small Business Administration disaster loans provide assistance for losses and damages not covered by insurance, including damage to property, machinery, inventory, and equipment. Loan repayments are not required to start in the first year, and the loans are interest-free for the initial year. In 2023, the SBA provided nearly $3 billion in disaster assistance nationwide, including funds for small businesses, homeowners, and renters. A bipartisan group of senators from hurricane-affected states is calling for Congress to reconvene in October to ensure timely legislation.
Florida Democrat Rep. Jared Moskowitz is introducing an emergency bill to increase funding for the Small Business Administration programs. Sen. Rick Scott has urged Congress to reconvene swiftly to approve new federal aid to address the destruction caused by Hurricane Helene. Congress has historically approved disaster relief measures without requiring a full return of all its members to Washington, D.C., as seen with the response to Hurricane Katrina in 2005.
The funding crisis for small businesses impacted by hurricanes and natural disasters is putting pressure on Congress to act quickly and provide additional funding. With the disaster loan fund running dry and thousands of applications being submitted daily, there is an urgent need for emergency intervention. President Biden and lawmakers are calling for immediate action to ensure that businesses and individuals affected by these disasters receive the support they need to recover and rebuild.
