S. 943 would require the Small Business Administration (SBA) to increase to $25,000 the amount that households, renters, and businesses may borrow without collateral to repair property damaged as a result of a disaster. Under current law, the agency does not require collateral for loans of $14,000 or less. The bill also would require the Government Accountability Office to report to the Congress, within three years of enactment, on repayment and default rates for disaster loans and how that performance would be affected by changes under the bill.
Using information from the SBA, CBO expects that some households and businesses who currently borrow amounts close to the $14,000 threshold would qualify for larger loans without providing collateral under the bill. Accordingly, CBO expects that some of those entities would borrow higher amounts.
