Senators Demand Answers as SBA Disaster Loans Run Dry

Senate Republicans are pointing to leadership failures at the Small Business Administration which just ran out of money for disaster loans. Congress is under pressure to authorize more money, but will it be too late?

A group of Senate Republicans wants answers from the Small Business Administration (SBA) after the agency ran out of money to issue new disaster loans. 

On October 15, 2024, the SBA announced that it had exhausted its disaster loan program after Hurricanes Helene and Milton devastated parts of the southeast.

Now, in a letter to SBA Administrator Isabel Casillas Guzman, four Republican Senators accuse the SBA of not notifying Congress ahead of time of the need for additional supplemental funding as required by law.

“These concerns are only heightened by the SBA’s lack of transparency, including the failure to provide an official Office of Management and Budget (OMB) request, and the requisite notifications and reports to authorizing committees,” wrote Senators Joni Ernst (R-IA), Jim Risch (R-ID), Tim Scott (R-SC), and Todd Young (R-IN).  “These considerable missteps by your agency and its urgent supplemental funding request raise significant questions as to the SBA’s ability to monitor its disaster portfolio.”

The Senators also sent other questions to SBA, including why the SBA did not request rerouting of $550 million in its disaster administrative funds account to the loan program, or whether the cadre of workers working on the disaster dropped below 1,000, as is required by law.

An SBA spokesperson told The Hill that the SBA first sounded the funding alarm in September 2023 and has repeatedly made funding requests.

“While SBA’s requests were unfortunately not fulfilled, the agency continues to stand ready to work with Congress so that the tens of thousands of small business owners, homeowners, and renters devastated by Hurricanes Helene and Milton can get the funding needed to rebuild their homes and lives,” the spokesperson added.

Speaker Not Buckling to Pressure

Meanwhile, House Speaker Mike Johnson (R-LA) insists he will not call Congress back to Washington before the election, repeating that he wants affected states to tell the federal government exactly what they need before authorizing more money.

“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,” said the speaker in a statement.

The Speaker has been pressured by members of both parties, but so far, has resisted calls for Congress to return.

Officials said the SBA program needs about $1.6 billion amid heightened demand following Hurricane Helene.

In the meantime, the SBA is urging those affected by the disaster to keep applying for loans.

“We know that swift financial relief can help communities recover quickly to stabilize local economies,” said Administrator Guzman. “While we await Congress to provide much-needed funding, we strongly encourage eligible businesses and households to apply for SBA disaster loans.”