SBA fund is out of money after Hurricanes Helene and Milton, Biden says

Biden encouraged disaster survivors to continue applying for assistance, and said the SBA would process new lending applications while the fund is empty and issue loans later. Congress is on a month-long recess until Nov. 12, after next month’s elections, and officials have said they will not call lawmakers back to Washington early to provide additional money.

“The Small Business Administration’s disaster loan program, which is a critical lifeline to small businesses, homeowners, and renters affected by disasters, has been exhausted,” Biden said in a statement. “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. SBA will continue to process applications and will disburse loans as soon as Congress provides the needed funding.”

White House officials had previously said the SBA needed $1.6 billion for the disaster program to get through the rest of the 2025 fiscal year, which only began Oct. 1.

Speaker Mike Johnson (R-La.) said the House would consider bipartisan disaster funding legislation upon its return, but added that the administration already has enough money to finance the initial hurricane response.

“There’s no question these devastating back-to-back storms have stressed the SBA funding program. But the Biden-Harris Administration has the necessary disaster funding right now to address the immediate needs of American people in these hurricane affected areas,” 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.”

SBA Administrator Isabel Guzman wrote to Congress last week, before Hurricane Milton tore through parts of Florida, to warn of an impending shortfall. The agency then had less than $50 million in loan authority, which was rapidly exhausted when new applications came in after that storm.

The SBA issues loans worth as much as $100,000 for renters, $500,000 for homeowners and $2 million for business owners, and typically offers much lower interest rates than commercial lenders. Interest rates are as low as 4 percent for businesses, 3.25 percent for nonprofit organizations and 2.813 percent for homeowners and renters, according to the agency. Monthly payments are not due until 12 months after the loan is first disbursed, and interest does not accrue for a year, either.

Still, because those loans must be repaid, SBA assistance is far less popular than aid from the Federal Emergency Management Agency. Lawmakers hope to provide additional funding for FEMA, but its budget does not face an immediate shortfall.

“We know that swift financial relief can help communities recover quickly to stabilize local economies,” Guzman said in a statement. “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.”

Individuals and businesses with existing loans will continue to receive payments, the agency said, and it could issue a small number of new loans as funds are made available through loan cancellations or maturation.

The SBA so far has issued more than 700 loans related to Hurricane Helene worth roughly $48 million. For Hurricane Milton, it has already received 12,000 applications.

Biden wrote to congressional leaders earlier in the month urging them to send new resources to the SBA before lawmakers’ recess period ends. That would require Congress to convene early — something leaders of both parties are loath to do in the middle of campaign season — or approve funding with the unanimous approval of all 535 members of the House and Senate. That would be an even more unlikely possibility, though one that could be logistically possible even without most members returning to Washington.