Today, the House Committee on Small Business held a hearing to review the Small Business Administration’s (SBA) disaster assistance programs and evaluate recent changes under the Trump Administration. Congressman Roger Williams (R-TX), who chairs the committee, led the session titled “American Resilience: Examining the SBA Disaster Assistance Program.”
Chairman Williams stated, “When disaster strikes, small businesses feel the impact and are often out of business for months or years, as they work to recover. They rely on the SBA’s disaster assistance program as a lifeline to rebuild and keep their doors open. From COVID-19 era fraud to a lapse in funding, the program—under the Biden Administration—failed when small businesses needed it most. Today’s testimony showed that Administrator Loeffler and President Trump are working hard to ensure that disaster assistance is fast, reliable, and accountable for the small businesses that build American communities.”
During the hearing, Rep. LaLota cited research indicating that about 25 percent of businesses do not reopen after disasters, and up to 90 percent can fail within two years. He asked about key steps for recovery. Mr. Stallings responded by emphasizing prompt support: “Quick turnaround of help—just getting it there quickly. One of the things we saw—and I’m very proud of a change we’ve made specific to businesses—is, prior to Administrator Loeffler and myself coming in and reviewing, one hurdle was: if an a state wanted to request a presidential declaration and there was a request for individual assistance and a few of those other steps, none of that benefited business. But our program was waiting for a response on individual assistance or another level of the declaration to determine whether we would make a change. I love—I’m like a two-year-old—I kept asking the question: why? Why are we waiting? Why? Why? I needed to know—and I could never get an answer that made me happy. So, we changed one of our processes to—we just call it a Phase One Declaration now—where, if there is a presidential declaration declared, we will immediately turn on business loans. There’s no assistance gained by an individual or any other level of presidential declaration. Why is that important? Unlike you, sir, I grew up in a very small community—eleven hundred people—from McCaysville, Georgia, and if we lost a gas station or our one IGA grocery store, we were shut down. It was thirty minutes to the next place, and so, as a kid, I wouldn’t ride my bicycle thirty minutes for eggs for my mom—I needed businesses to get back. And we felt that at that local level. We understand that if businesses close, communities are done. We could lose a few homes and have some folks move out, and that’s bad for the community, that’s important. But if we close gas stations, and we close restaurants, and we close entertainment facilities, and we close the shopping centers, and we close these other things, and we don’t get them back open soon, it doesn’t take long for the community to dissolve. Folks begin to move out. And so, for us, getting that back open, that is priority one because without those businesses there is no community sir.”
Rep. Stauber questioned Mr. Stallings about an incident during which SBA's disaster account ran out of funds in October 2024 following Hurricanes Milton and Helene; this left families and small businesses unable to receive new loans for over two months due to what Stauber described as failures in budgeting and communication with Congress.
Mr. Stallings replied: “Thank you for the question. The first thing I’d like to highlight is that under Administrator Loeffler’s leadership; the first thing we did was reopen all active disasters for an additional sixty days... So anyone who was impacted by those disasters—there was an immediate extension saying ‘we’re here.’ We’re in charge... The second part is... The report that was being submitted—it was very difficult to understand... It did not track meaningful metrics... With [the new] report it lays out very clearly where we stand... bringing in those economists... using common-sense approaches... has been so far very helpful.”
Fraud during pandemic-era SBA loan programs also came under scrutiny from Rep Downing who referenced findings from SBA's Office of Inspector General showing over $200 billion in fraudulent loans or grants out of $1.2 trillion distributed during COVID-19 relief efforts.
In response Mr Stallings said: “Well I appreciate the question... since day one Administrator Loeffler has said we're going look into all our programs... what we're seeing is money went folks never eligible money first place... specifically talking about Shuttered Venue Operator Grant (SVOG)... we've had lot folks should've never gotten money first place...” When asked how trust could be restored he continued: “So something we've done is reviewed looked at loopholes could make easy do—for instance verification damage... A lot times done—it moved ten percent only—where would do physical inspection... rest done virtually if you will... taken option away… brought loss verifiers put them back ground got them out offices making go through damaged areas ensure folks receiving funds actually received damage eligible… Also we're following up making sure if you request our loan—before just give arbitrary large amount money—you've done everything have do get money…”
The hearing highlighted ongoing efforts by current SBA leadership aimed at improving disaster response speed accountability transparency eligibility checks after previous lapses.
