HR-3557-119
Referred to the House Committee on Small Business.
Sponsored by Joe Neguse (D-CO)
What it does
This bill would amend the Small Business Act to temporarily waive both the accrual of interest and required payments on certain Small Business Administration (SBA) disaster loans for a period of one year. Borrowers who qualify would not owe interest charges or be required to make loan payments during the waiver period. The bill is currently in committee and its full eligibility criteria are not detailed in the available text.
Who benefits
Small business owners who have taken out SBA disaster loans following federally declared disasters (such as hurricanes, floods, wildfires, or other qualifying events). Businesses in disaster-affected communities that are struggling to recover and service debt simultaneously. Employees of those small businesses, who may benefit indirectly if their employers remain financially solvent. Local economies in disaster-affected regions that depend on small business activity.
Who is hurt
The federal government would forgo interest revenue it would otherwise collect during the waiver period, increasing the net cost of the SBA disaster loan program. Taxpayers broadly bear the fiscal cost of uncollected interest. Competing lenders in the private sector may face a disadvantage if federally subsidized terms become more attractive. Businesses that did not take SBA disaster loans — or whose disasters were not federally declared — would not benefit, potentially creating an uneven playing field among similarly situated small businesses.
Supporters argue
Supporters argue that small businesses struck by disasters face a compounding burden: they must simultaneously rebuild operations, replace inventory or equipment, and service loan debt — often before revenue has recovered. They contend that a one-year interest and payment waiver provides a targeted, time-limited bridge that prevents otherwise viable businesses from defaulting, preserving jobs and accelerating community recovery. Historical SBA data from past disasters shows that early-stage loan defaults spike in the first 12 months post-disaster, suggesting a structured pause could reduce long-term program losses.
Opponents argue
Opponents argue that waiving interest accrual — not merely deferring payments — amounts to a direct federal subsidy that increases program costs and sets a precedent for routine forgiveness of federal loan obligations. They contend that the SBA disaster loan program already offers below-market interest rates and flexible terms, and that adding a blanket one-year waiver without means-testing or demonstrated hardship requirements could benefit businesses that do not need the relief, misallocating limited federal resources and creating moral hazard for future borrowers.