Expand disaster loans for prolonged outages

Summary#

H.R. 2897, “To amend the Small Business Act to make disaster loans available for damages caused by prolonged power outages,” would amend the Small Business Act. Its stated goal is to make certain disaster loans available when prolonged power outages cause qualifying losses. The bill is not law; it has been referred to the House Committee on Small Business.

  • For two existing loan authorities, it would add qualifying prolonged power outages to the definition of “disaster.”
  • For one loan authority, the outage must cause at least 25 homes, businesses, or other eligible recipients in a county or smaller area to each have uninsured property losses of at least 40% of the lower of the property’s estimated fair replacement value or pre-disaster fair market value.
  • For the other loan authority, at least 25 homes, businesses, or other eligible recipients in an area must lose power at the same time for at least 48 hours.
  • A borrower receiving a loan because of such an outage may use it to buy listed energy resilience systems—including generators, solar panels, wind turbines, microgrids, fuel cells, and batteries—and other power generation or storage technologies the Administrator considers appropriate.
  • Such a borrower may also use loan proceeds to replace the borrower’s food or drink lost, destroyed, or made unfit to eat because of the outage.

What it means for you#

  • Businesses and other potential borrowers: If an outage meets the relevant threshold, the bill would make disaster loans available under the two Small Business Act authorities. Receiving a loan is not automatic. The bill does not set out application or approval rules.
  • Households: Homes count toward the outage thresholds. The bill text alone does not establish whether a household could receive a loan; that depends on eligibility rules in the existing law, which was not supplied.
  • Borrowers: The listed energy systems and replacement food or drink would be allowed uses of loan proceeds. The bill does not create a grant or require borrowers to buy these items.
  • Public agencies: The bill gives the Administrator discretion to decide which additional power generation and storage technologies are appropriate.

Money#

No publicly available information on projected federal cost is included in the supplied material.

  • The bill would make existing disaster-loan authorities available for qualifying outages, but it does not provide a funding amount or estimate of loan costs.
  • It does not set loan amounts, interest rates, or repayment terms.
  • The bill does not specify staffing or administrative costs.

What is unclear#

  • The Small Business Act provisions being amended were not supplied, so the existing eligibility rules, loan terms, and limits could not be verified.
  • The bill does not explain how applicants would show that an outage and losses meet the thresholds, or how the Administrator would decide whether a technology is appropriate.
  • It does not say how the two loan authorities would interact with other disaster assistance.
  • No start date or implementation details are stated in the supplied bill text.

Case for#

  • The bill appears intended to address losses caused by outages that may not fit the existing disaster-loan rules.
  • A possible argument for the bill is that loans could help eligible borrowers replace spoiled food and invest in systems that provide power during future disruptions.
  • The two thresholds set conditions for access: one focuses on substantial uninsured property losses, and the other on a power loss lasting at least 48 hours affecting a group of recipients.

Case against#

  • The thresholds may leave some outage-affected borrowers outside the new rules—for example, where fewer than 25 eligible recipients are affected or the outage does not meet the relevant loss or duration test.
  • The bill does not explain how losses, the number of affected recipients, or technology choices would be assessed.
  • The expected federal cost and the terms borrowers would face are not available in the supplied material.