October 16, 2024
Welp. Money has just run out for hurricane disaster victim recovery.
But it’s not FEMA that’s out of money. FEMA definitely still has money to help the victims. It’s another federal agency that’s also helping disaster victims that’s tapped out.
Ok –so the Small Business Administration’s Disaster Loan program is out of money. And you’re probably thinking – what does it matter if they’re out of money….we’re talking about hurricane disaster recovery here? Yeah – we are. And as I have reported repeatedly, it’s not just FEMA that shows up to help people recover when disasters like hurricanes Helene and Milton hit. All federal agencies show up – including the Small Business Administration to help small business owners, homeowners and renters get back on their feet with long term, low interest loans with delayed payments. By the way – just because the loan is coming from the SBA does not mean that these long term, low interest loans are only for small businesses… of course small business owners are eligible but these loans can also be given to homeowners and renters. For homeowners that means they may qualify for loans up to $500,000 to fix their homes and for homeowners or renters they may qualify for a loan up to $100,000 to replace lost property. Business owners may qualify for loans up to $2 million for both physical damage and economic injury from business disruption. These are 30-year loans with low interest rates. And interest doesn’t start accruing and your first monthly payment doesn’t start until 12 months after the date of the first disaster loan disbursement.
But – President Biden has been warning for weeks – that while congress gave FEMA an additional $20 billion in the temporary government funding bill to handle disaster recovery back in September — they did not add any more money to the SBA disaster loan program. Then millions of Americans got hit with two major storms and now – the SBA is dealing with 37,000 initial applications from victims from hurricane Helene and more than 12,000 initial applications from Milton. So far the SBA has made $48 million in loan offers and that program is out of money.
Now – that doesn’t mean business owners, homeowners and renters who are recovering from these disasters are out of luck. According to the SBA if you live in one of the 173 declared disaster areas and you had damage to your home or business… you may want to consider applying for one of these SBA disaster loans. Even though they are technically out of money – they are still accepting new applications and getting qualified victims in a queue. If you find yourself in that queue – you may receive a loan offer but the money won’t come through until congress funds the program. The SBA also said those victims who have already been approved will still receive their payments. It’s the new applicants that will have to wait.
So the question is – what is Congress going to do? Well – nothing until a week after the election. Lawmakers are on recess and when they return on November 12th they’ll not only have to figure out SBA funding – but funding for the whole federal government because there’s a government shutdown scheduled for December 20th.
More from the SBA here.
