The Small Business Administration is running low on funds for its disaster loan program in the wake of back-to-back hurricanes, prompting officials to urge Congress to reconvene and approve additional relief, The Hill reported.
The SBA has approximately $50 million left for new disaster loans, but the agency anticipates these funds will be depleted before lawmakers return from recess next month. The agency estimates that an additional $1.6 billion is needed to meet rising demand.
"SBA staff is currently on the ground across the country working to support communities impacted by disasters," SBA Administrator Isabel Casillas Guzman said in a statement. However, she noted that the agency is "quickly exhausting current federal funding to make new offers for affordable recovery loans to homeowners, renters, small businesses, and non-profits."
President Joe Biden also highlighted the urgency of the situation, telling reporters on Thursday that Congress needs to address the issue promptly.
"Congress should move as rapidly as they can, particularly on the most immediate need, which is small business," Biden said.
Last month, Congress passed a temporary measure to prevent a government shutdown but did not include supplemental funding for the SBA or the Federal Emergency Management Agency.
FEMA, which manages disaster recovery efforts, has reported that it has sufficient resources to handle immediate needs related to the hurricanes. However, nearly half of FEMA's $20 billion reserve has already been allocated, raising concerns about future disasters. The agency has been given the flexibility to tap into fiscal year 2025 funds to sustain its current operations under the stopgap funding bill.
While FEMA officials have reassured the public that they are prepared to address short-term disaster response needs, the SBA's disaster loan program is under greater strain. The SBA has indicated it will continue to process disaster loan applications even if funds are depleted. However, further loan offers and disbursements will be contingent upon new funding from Congress.
In response to the escalating crisis, several lawmakers, including Democrats and some Republicans, are pushing for Congress to cut short its recess and reconvene before the scheduled Nov. 12 return.
A group of House Democrats recently sent a letter to Speaker Mike Johnson, R-La., urging him to replenish disaster relief funds.
"The Federal Emergency Management Agency (FEMA) must be equipped not only to respond to current disasters but also to adequately prepare for future events," the letter stated.
However, Johnson has resisted calls to bring Congress back early, stating that FEMA has enough funding to manage immediate needs until lawmakers return.