The U.S. Small Business Administration (SBA) is days away from running out of money to lend restaurants and other small businesses struggling to recover from Hurricanes Helene and Milton, agency chief Isabel Guzman warned congressional leaders last week.
The possible shortfall came to light as restaurants in Florida assess the impact of Hurricane Milton, the violent storm that hit the state last week. First Watch, the breakfast-and-lunch-only chain headquartered there, said today that 85 company-run restaurants closed for at least one day after Hurricane Milton struck, and eight remain closed. Ten corporate units were shut for at least a day after Helene.
Recovery in Florida and several states north of it continues to be assisted by the Federal Emergency Management Agency (FEMA). That agency says it has sufficient funds to continue aiding those areas, but acknowledges that it has already burned through $9 billion of the $20 billion that was specially allocated by Congress for emergency relief for the fiscal year that began Oct. 1, 2024. Those extra dollars were given to FEMA as the Southeast braced for Hurricane Helene.
FEMA Administrator Deanne Criswell warned Friday that the relief agency may have to withhold assistance in subsequent disasters unless its funding is re-upped by Congress. Meteorologists are already watching a storm system in the Atlantic that the National Hurricane Center has given a 40% chance of developing into a hurricane.
The SBA’s resources may be depleted mid-stride in its efforts help small businesses in Florida get back in operation, Guzman said in a letter that was obtained by The Washington Post. The agency’s lending pool is reportedly down to $50 million.
Michael Johnson, speaker of the House of Representatives, has publicly vowed that Congress will not leave the recovery effort unfunded. But he said Sunday that he won’t recall the House before the Nov. 5 election, arguing that the federal government may not know beforehand exactly how much additional money may be needed.
President Biden has urged the Louisiana Republican not to wait until then, arguing that the help is required right now.
In an appearance on the Sunday CBS program “Face the Nation,” Johnson refuted Criswell’s warning about FEMA’s resources. He asserted that the agency has spent only 2% of the $9 billion it was allocated for emergency hurricane relief, and should be able to continue its aid efforts in the Southeast,
“We need FEMA to do its job,” Johnson said during the broadcast.
The SBA aids small businesses by lending capital through a network of local banks and other institutions at an attractive rate. Those institutions have the assurance that SBA will repay the loans if the borrower should default.
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