Congress tightens oversight of disaster loan program after 2024 funding crisis

What it does

This bill requires the Small Business Administration to provide Congress with detailed monthly reports on disaster loan spending, including when funds are running low and when they will be depleted. It mandates that the President's budget requests include 10-year cost comparisons for disaster loans and COVID-relief loans, and triggers automatic restrictions on new disaster loans (requiring collateral) if available funding drops below 10% of the 10-year average. The bill also orders the Government Accountability Office and SBA Inspector General to investigate how the SBA ran out of disaster loan money in 2024 and to recommend improvements to forecasting and internal controls.

Why we flagged it

The bill's core mechanism is a transparency and accountability framework for the SBA's disaster loan program. It does not create new benefits or restrictions on borrowers; instead, it imposes reporting, forecasting, and oversight requirements on the federal agency administering the program.

What the text implies

• The automatic funding limitation (requiring collateral when funds drop below 10% of 10-year average) may slow or restrict access to unsecured disaster loans during future crises, potentially disadvantaging homeowners and small businesses without substantial collateral.
• The 4-year sunset on the funding limitation provision creates uncertainty about whether the safeguard will persist beyond 2029, potentially allowing the SBA to revert to less restrictive practices.
• The bill's focus on forecasting accuracy and budget assumptions may indirectly pressure the SBA to request larger appropriations upfront, which could affect overall federal spending priorities.
• The Inspector General review of the 2024 funding shortfall may reveal systemic failures in the SBA's administrative structure or decision-making, potentially leading to reorganization or staffing changes that could affect program delivery.

Section numbers refer to the bill text the analysis read — linked under Primary records below.

Who it affects

The bill strengthens congressional oversight and transparency of a federal loan program that serves disaster victims and small businesses. By requiring detailed reporting, mandating budget comparisons, and triggering automatic safeguards when funds run low, it reduces the risk of future funding shortfalls that leave disaster victims without access to loans. The restrictions on the SBA's discretion and the mandatory investigations into past failures improve accountability and public trust in the

Named in the bill

Small Business Administration (SBA), Government Accountability Office (GAO), SBA Inspector General, Congress (Senate Committee on Small Business and Entrepreneurship, House Committee on Small Business, Federal Credit Reform Act of 1990, CARES Act (Section 1110), Small Business Act (Section 7), Small Business Disaster Response and Loan Improvements Act of 2008

Where it stands

9 cosponsors: 8 Republicans, 1 Democrats.

• Jan 29, 2025 — Introduced · Congress.gov: “Introduced in Senate”
• Jan 29, 2025 — Referred to Senate Committee on Small Business and Entrepreneurship · Congress.gov: “Read twice and referred to the Committee on Small Business and Entrepreneurship”
• Feb 20, 2025 — Reported out of committee · Congress.gov: “Committee on Small Business and Entrepreneurship. Ordered to be reported with an amendment in the nature of a…”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.

Money around this bill

1 lobbying clients named this bill on 2 disclosure filings across 2 quarters, Dec 2025 to Mar 2026. Those filings disclosed $37,710,000 in lobbying spend. A filing names 272 bills on average, so that figure is what each filing reported, not a share belonging to this bill.

More lobbying clients named this bill than 0% of bills with at least one filing.

Ted Budd, the sponsor, reported $300,250 in PAC receipts in the 2026 cycle.

• Chamber of Commerce of the U.S.A. — $37,710,000 on 2 filings

Lobbying Disclosure Act filings through Jul 14, 2026. A filing shows who paid to lobby on a bill it names, not what changed.