NEW YORK (AP) – The Small Business Administration is running low on funds for disaster relief loans it offers to small businesses, homeowners and renters following the destruction of Hurricanes Helen and Milton. Much-needed relief has been delayed for those applying. .
The SBA provides Economic Injury Disaster Loans to businesses and people affected by disasters. S.B.A. It warned earlier this month that funds could run out.there will be no additional funding from Congress given the expected surge in insurance claims from Hurricane Helen.
There are other disaster relief programs available, including assistance from the Federal Emergency Management Agency (FEMA). FEMA aid is not affected by SBA shortages.
Helen was the first Category 4 storm to hit the Florida Gulf Coast on September 26, dumping trillions of gallons of rain. Hundreds of miles of destruction across several states. Two weeks later, Hurricane Milton hit Florida.
AP correspondent Lisa Dwyer reports that the Small Business Disaster Loan program is running out of money.
So far, the SBA has received approximately 37,000 applications for relief from people affected by Hurricane Helen and has made more than 700 loan offers totaling approximately $48 million. We received 12,000 applications from people affected by Hurricane Milton.
The SBA has paused new loan offers until more funds are available, so loans that have not yet been made will be delayed by at least a month. But SBA Secretary Isabel Casillas Guzman said people should continue applying for loans.
“We know that quick financial relief can help communities recover quickly and stabilize local economies,” Guzman said in a statement. He added that the SBA will continue to process applications to ensure assistance is disbursed quickly as funds are replenished.
The SBA said it may also be able to offer a small number of new loans during this period if more funds are available through loan cancellations or similar actions.
House Speaker Mike Johnson has promised strong support to provide the needed funding once Congress returns after the November election.
“There is no question that this series of catastrophic storms has placed stress on the SBA’s funding programs,” Johnson, a Republican, said in a statement. “But the Biden-Harris administration now has the disaster funding needed to meet the immediate needs of Americans in hurricane-affected areas.”
The speaker has refused to summon lawmakers back to Washington to vote on aid in the wake of the deadly hurricane, and continues to refuse to do so. He said Congress is following the situation closely.
“Once members return in just a few weeks, the administration should be able to accurately assess the amount actually needed, and there will be strong bipartisan support to provide the necessary funding.” said.
The SBA offers two different types of disaster loans. Commercial property disaster loans are designed to repair or replace disaster-damaged assets such as real estate, inventory, supplies, machinery and equipment. Economic Injury Disaster Loans meet financial obligations that small businesses, small agricultural cooperatives, small businesses engaged in aquaculture, and most private nonprofit organizations cannot meet as a direct result of a disaster. This is a working capital loan that supports the
Businesses can receive loans of up to $2 million. Interest rates are as low as 4% for businesses and 3.25% for non-profit organizations.
The SBA is also offering disaster loans of up to $500,000 to homeowners to repair or replace property damaged or destroyed in a disaster. Homeowners and renters are eligible to receive up to $100,000 to repair or replace personal property damaged or destroyed in a disaster.
FEMA’s Disaster Relief Fund is money that FEMA uses to respond to disasters. The money will be used to reimburse state and local governments for debris removal and rebuilding public infrastructure damaged by the disaster. FEMA also provides funds to disaster victims for expenses such as rent while they are unable to live in their homes, and for emergency needs such as diapers.
FEMA Administrator Deanne Criswell has repeatedly said there is enough money in the disaster relief fund to respond to Helen and Milton. But Criswell said the agency will ultimately need additional funding from Congress. If that doesn’t happen, the agency will begin seeking so-called “emergency funding.” This means the agency will stop paying for past disasters and save money for life-saving operations when new disasters occur.
For more information on all government assistance programs, visit https://www.disasterassistance.gov.
__
AP writers Lisa Mascaro and Rebecca Santana in Washington contributed to this report.