The SBA was quick to come to the aid of entrepreneurs who were hurt by the terror attacks of September 11, expanding its disaster relief efforts by starting the September 11 economic injury disaster loan program late last October. But with the agency making so many loans to help out disaster victims, should you be worried that its budget will be decimated, adversely affecting the SBA's ability to provide the guaranteed loans that many small businesses rely on?
According to Mike Stamler, director of the SBA press office, there's no need for concern. "The money we are spending on disaster relief loans is money that was specifically budgeted for that purpose, and we have ample funds in our budgets for fiscal year 2001, which ended September 30, and for fiscal year 2002, which began on October 1."
To meet the additional needs of the disaster loan program, the SBA received a special grant of funds from Congress. In fact, Stamler notes, "We have enough for $1.2 billion in disaster loans, and the total loaned out so far is less than $200 million."
Should the $1.2 billion disaster loan fund run dry, the SBA would be required by law to seek additional funding from Congress and could not shift money from the guaranteed loan account to the disaster account unless Congress authorized such a move.
The SBA is dealing with guaranteed loans the same way it's always handled them, says Stamler, adding that at press time, the volume of guaranteed loans going through the agency was 6.5 percent higher in 2001 than it was during the same period in 2000.