DLARA

The bill would require the SBA to report monthly (instead of only during a declared disaster's applicable period) on the disaster loan program, including projected dates when available funding falls to 10 percent of the latest appropriation and when it will be depleted. It would require the President's annual budget to include separate justifications for SBA disaster loan and COVID-19 Economic Injury Disaster Loan funding requests, including any gap from the 10-year average cost. For four years, it would require the SBA to notify Congress when unobligated disaster loan funds drop below 10 percent of the 10-year average annual cost, after which the agency could limit new loans to collateralized amounts, with disbursement resuming within 14 days once more funds are appropriated. The bill would also require a GAO report on SBA disaster loan disbursement rates and borrower amounts, a GAO report on the cost effects of two 2023-2024 SBA rule changes to loan terms, an SBA Inspector General review of a 2024 disaster loan funding shortfall, and SBA reports on improving its cost forecasting. It does not create new loan programs or change loan eligibility itself.

The Small Business Administration and its Administrator, the Office of Inspector General, the Government Accountability Office, and congressional committees on small business and appropriations. Small businesses and homeowners who rely on SBA disaster loans could be affected indirectly if low funding triggers collateral-only lending limits.

Disaster loan applicants could face stricter collateral requirements if the SBA's funding runs low, since the bill lets the agency limit loans to collateralized amounts during shortfalls. Congress would gain earlier warning and more detailed reporting about disaster loan funding levels, aimed at preventing the kind of shortfall the SBA experienced in 2024.

The SBA would file monthly disaster-loan reports and, for four years, monitor unobligated balances against a 10-year average cost benchmark set in the President's budget; crossing the 10 percent threshold triggers a 24-hour notification to four congressional committees and allows the agency to restrict lending to collateralized loans until more funds are appropriated, with a 14-day catch-up disbursement requirement afterward. GAO and the SBA Inspector General would separately investigate loan disbursement patterns, past rule changes, and the 2024 funding shortfall, reporting to Congress within 180 days to one year of enactment. The SBA would also report within 30 days on forecasting corrections and file updates every 90 days until implemented.