WASHINGTON, D.C. – Today, Congressman Roger Williams (R-TX), Chairman of the House Committee on Small Business, held a hearing titled “American Resilience: Examining the SBA Disaster Assistance Program” to examine the existing structure of the Small Business Administration’s disaster assistance programs and assess how the Trump Administration is strengthening federal disaster response capabilities.

“When disaster strikes, small businesses feel the impact and are often out of business for months or years, as they work to recover,” said Chairman Williams. “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.”

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Watch the full hearing here.

Below are some key excerpts from today’s hearing:

Rep. LaLota: “My staff’s research indicates that after disasters, about twenty-five percent of businesses don’t reopen, and up to ninety percent can fail within two years. From your experience in emergency management, what are the make-or-break first steps after a disaster that determine whether a small business can make it back on its feet?” Mr. Stallings: “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: “Mr. Stallings, the SBA’s disaster loan program is supposed to be a lifeline in those moments. However, under the Biden Administration, the program did something that had never happened before. The disaster account ran dry in October of 2024 after Hurricanes Milton and Helene, and for sixty-eight days, the SBA couldn’t approve new loans for families and small businesses who had just lost everything. This was more than just a budgeting failure—it was a failure of basic communications with Congress and of planning for more expensive disasters. How are you changing the way SBA tracks, predicts, and communicates the state of the disaster account so that Congress will never again be blindsided by the program running out of money?” Mr. Stallings: “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. We acknowledge the fact that there was a funding lapse. So, anyone who was impacted by those disasters—there was an immediate extension saying, ‘we’re here. We’re in charge. We’ve got money available. Let’s make a change.’ And so, we tried to reenergize morale in those affected communities. The second part is that we took a really in-depth look at the report. The report that was being submitted to Congress—when it was being submitted—it was very difficult to understand. It did not track meaningful metrics, and so we cleaned up that report. I joke that the only thing that’s tough to look at is the photo they keep sticking me on the front of the thing. Other than that, it’s a pretty easy-to-look-at report. And so, with that report, it lays out very clearly where we stand. And so, bringing in those economists, and meteorologists, and subject matter experts in building and recovery, using a lot of the lessons learned as an emergency manager in Georgia when we were forecasting what our year could look like for our budget, I think it was important that we just used normal folks thinking normal ways, using common-sense approaches, and it’s been, so far, very helpful.”

Rep. Downing: “Under the Biden Administration, the SBA became a hot spot for fraudulent spending of taxpayer dollars. According to the SBA’s Office of the Inspector General, over 200 billion dollars of the 1.2 trillion dollars in SBA COVID-19 loans and grants were fraudulent. From your understanding, what was the driving force behind the Biden Administration SBA’s tolerance of fraud, and was this incompetence or malice?” Mr. Stallings: “Well, I appreciate the question. We’ve been reviewing—and certainly since day one, Administrator Loeffler has said we are going to look into all of our programs. We want to find our eligibility criteria, things of that nature, and I think that what we’re seeing is that money went to folks that were never eligible for the money in the first place. Our team—specifically talking about, say, the Shuttered Venue Operator Grant, or SVOG, as it’s so widely known as—as we’ve been able to look at that program, we had a lot of folks that should’ve never gotten money in the first place. Or they’ve not been responsive. They won’t follow up and complete the application. We’re still dealing with folks now, four years later, and businesses that have yet to send us in final documentation and things like that. So, our team is actively pursuing that. I think it was just not following through on what a grant is.” Rep. Downing: “So, how does the SBA plan to restore trust in its disaster loan program in the aftermath of this, you know, unprecedented fraud during COVID?” Mr. Stallings: “So, something we’ve done is, we’ve reviewed and looked at loopholes that could make it easy to do—for instance: verification of damage. A lot of times, it was done—it was moved to a ten percent only—where we would do a physical inspection. So, of one hundred loans, ten of them got eyes laid on it to make sure it actually was in the area, and made sure it received physical damage. The rest of it was done virtually, if you will. And so, we’ve taken that option away. There’s a certain dollar figure there. We are looking at twenty-five thousand dollars or more of damage that we were sending our folks out to review. We’ve brought our loss verifiers, put them back on the ground, got them out of offices, making them go through the damaged areas to ensure that folks who are receiving our funds have actually received damage and are eligible. Also, we’re following up, making sure that if you request our loan—before we just give you this arbitrary large amount of money—you’ve done everything you have to do to get the money. That we’re not just giving you money and then hoping you finish up the drill.”

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