### SBA Disaster Loan Program Runs Out of Funds Amid Southeast Storms

The recent severe storms in the southeastern United States have severely depleted the Small Business Administration's (SBA) disaster loan fund, President Joe Biden revealed on Tuesday. This unexpected shortfall has put a halt to the issuance of new low-interest loans, which could significantly slow recovery efforts for millions affected by the hurricanes.

The SBA's disaster loan program, designed to assist renters, homeowners, and businesses, has been forced to cease new lending until Congress approves new funding. Although existing loan recipients will continue to receive payments, future applicants will have to wait until additional funds are allocated. Despite this, Biden has urged disaster survivors to continue submitting their applications. The SBA plans to process these applications in the interim and issue loans once the fund is replenished.

Both the House and Senate are currently on a month-long recess and will not reconvene until November 12, post the upcoming elections. According to Biden, Speaker Mike Johnson has committed to replenishing the disaster programs once Congress is back in session. The White House estimates that the SBA needs $1.6 billion to maintain its disaster relief efforts through the end of the 2025 fiscal year, which began on October 1.

Speaker Mike Johnson emphasized that while the storms have stressed the SBA's resources, the Biden-Harris Administration possesses adequate funds to address the immediate aftermath of the hurricanes. He also mentioned that lawmakers are closely monitoring the situation and are prepared to support further funding once a clearer picture of the required resources is available.

Just before Hurricane Milton struck Florida, SBA Administrator Isabel Guzman alerted Congress to an impending shortfall. At that time, the agency had less than $50 million in loan authority, which was quickly depleted as new applications poured in following the storm. The SBA offers loans of up to $100,000 for renters, $500,000 for homeowners, and $2 million for business owners at interest rates significantly lower than those of commercial lenders.

Despite the favorable terms, SBA loans are less popular than Federal Emergency Management Agency (FEMA) aid because they must be repaid. Lawmakers are also looking to bolster FEMA's budget, which is not currently at risk of running out of funds.

Guzman reaffirmed the agency's commitment to supporting disaster victims, encouraging eligible businesses and households to apply for loans despite the current funding lapse. The SBA has issued over 700 loans related to Hurricane Helene, totaling approximately $48 million, and has already received 12,000 applications in the wake of Hurricane Milton.

Earlier this month, Biden encouraged congressional leaders to allocate new resources to the SBA before their recess, a move that would require convening Congress early or achieving unanimous approval from all 535 members—an unlikely scenario, particularly during the campaign season.