Improving SBA Disaster Loan Ability To Provide Meaningful and Timely Assistance
Published Date: 1/29/2026
Rule
Summary
The SBA is making it easier and faster for small businesses and homeowners to get disaster loans by cutting through some state and local rules that slow things down. This change applies to loans approved from January 1, 2025, onward and aims to speed up repairs and recovery after disasters. The new rule kicks in January 29, 2026, and the SBA wants your feedback by March 2, 2026.
Analyzed Economic Effects
3 provisions identified: 1 benefits, 0 costs, 2 mixed.
Use Disaster Loan Funds Without Delaying Permits
If a required state or local permit or approval causes a delay of more than 60 days after you submit a complete application, that permit/approval is preempted and you may proceed with Disaster-Related Activities using SBA Disaster Loan proceeds. This applies to loans approved on or after January 1, 2025, and the rule is effective January 29, 2026; local governments cannot enforce stop-work orders or penalties for failing to meet those preempted requirements.
Builder Self-Certification and New Paperwork
Before starting work without a preempted permit, an SBA Disaster Loan borrower must provide a builder's self-certification to SBA that the builder has complied and will comply with all substantive state and local rules not preempted (e.g., building codes, inspections, certificate of occupancy). If the borrower fails to meet these certification rules, SBA will consider the borrower in default. SBA estimates the new information collection will total 18,000 annual responses and 9,000 annual burden hours.
Nationwide Economic and Local Government Effects
SBA estimates about 18,000 disaster loan borrowers per year (about 3,000 are small businesses) and expects one-third of disaster loans (~6,000) and two-thirds of disaster dollars (~$500 million) to be for Presidentially-declared disasters while this rule is in effect. SBA models that reducing average recovery time by 2–4 months could yield gross net benefits of about $19 million to $37 million per year, and after accounting for potential state/local staffing costs (estimated at about $4 million annually) net benefits are estimated at $15 million to $33 million annually; midpoint net present values are reported as $368 million at 3% and $272 million at 7%.
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Key Dates
Department and Agencies
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