SBA exhausts funds for new disaster loans, but survivors should continue to apply
WASHINGTON — On Thursday, the U.S. Small Business Administration (SBA) announced that it has exhausted funds for its disaster loan program after warnings that funding would soon run out following a surge in demand from Hurricane Helene — one of more than 150 current disaster declarations.
So far, the SBA has seen around 37,000 applications for relief submitted from those impacted by Hurricane Helene alone.
Along with the recent hurricanes impacting significant portions of the South, the ongoing drought continues to impact areas in West Texas.
According to a news release, "until Congress appropriates additional funds, the SBA is pausing new loan offers for its direct, low-interest, long-term loans to disaster survivors. However, SBA is encouraging individuals and small businesses to continue to apply for loans given assurances from congressional leaders that additional funding will be provided upon Congress's return in November."
The SBA's loan application portal remains open.
In addition, SBA's disaster centers and in-person staff remain deployed across the country, and the agency will continue to accept new applications and ready borrowers to get their disaster loan offers as soon as possible once Congress appropriates funds, SBA said. Disaster survivors in need of an SBA loan for personal belongings, residential property damage, and business damage and disruption should not wait to apply.
"Disaster survivors should start the application process immediately, regardless of SBA funding availability, so that our disaster teams can take them through the application process and position eligible applicants to receive offers and funds," the release states.
SBA loans in recent years have been offered for support of those recovering in the Texas Panhandle and South Plains in particular from various natural disasters, including drought, tornadoes, wildfires and even flooding. The most recent assistance offered was for those recovering from damages wrought by the massive Smokehouse Creek Fire and the Windy Deuce Fire in February, with three outreach centers set up in Borger, Canadian and Fritch .
"We know that swift financial relief can help communities recover quickly to stabilize local economies," said Administrator Isabel Casillas Guzman in the release. "While we await Congress to provide much-needed funding, we strongly encourage eligible businesses and households to apply for SBA disaster loans. SBA will continue to support homeowners, renters, businesses and nonprofits in processing their applications to ensure they receive assistance quickly once funds are replenished."
In the meantime, the SBA said it will continue loan processing operations including supporting current borrowers and new applicants, and the agency will continue to accept and process new applications from all 173 disaster declarations that it is supporting and queue eligible applicants.
"Applications in this queue can receive loan offers after additional funding from Congress becomes available and will be processed in the order in which they were received. The SBA will issue declines for new applicants who do not meet eligibility or underwriting criteria for a loan and provide information on additional resources for support," the release states.
SBA will also continue to support existing borrowers and applicants who have already received offers. The SBA has already made more than 700 Helene loan offers — totaling about $48 million.
As for Hurricane Milton, the storm which followed shortly after Helene's destructive path, the SBA has already received over 12,000 applications, the SBA said.
"Importantly, despite this funding lapse, borrowers who already have a loan offer will continue to receive disbursements, and borrowers who already have existing loans may continue with servicing actions and loan modifications," the release states.
The SBA said it may continue to make a small number of new loan offers during this time, as funds may be made available through loan cancellations and similar actions.
Following federally declared disasters, the SBA steps in immediately to provide financial relief to business owners, nonprofits, homeowners, and renters with long-term, low-interest loans. Studies have shown that the SBA's loan program is a crucial resource for small businesses and households recovering from disaster — whether it's used for debris removal, replacing a damaged car, or covering loss of revenue due to business disruption, the release said. SBA loans allow borrowers to avoid predatory bridge loans or using a credit card with high interest rates.
Provided Congress makes funds available, SBA can make disaster loans up to $500,000 to homeowners to repair or replace disaster-damaged or destroyed real estate. Homeowners and renters may be eligible for up to $100,000 to repair or replace disaster-damaged or destroyed personal property. Businesses may be eligible for loans up to $2 million for both physical damage and economic injury from business disruption. Interest rates are as low as 4% for businesses, 3.25% for nonprofit organizations, and 2.813% for homeowners and renters, without credit elsewhere, and terms are up to 30 years.
Applicants may apply online and receive additional disaster assistance information at sba.gov/disaster .
Applicants may also call SBA's Customer Service Center at 800-659-2955 or email for more information on SBA disaster assistance.
People who are deaf, hard of hearing, or have a speech disability can dial 7-1-1 to access telecommunications relay services.
Individual survivors are also encouraged to visit disasterassistance.gov for resources including assistance from FEMA.
