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GAO-26-109126: SBA Disaster Loans: Assistance for Businesses Affected by Low Snowfall or Warm Winters

Summary

GAO-26-109126, SBA Disaster Loans: Assistance for Businesses Affected by Low Snowfall or Warm Winters, a Government Accountability Office Q&A report to congressional committees dated July 14, 2026. It cites preliminary National Ski Areas Association data showing a 9 percent decrease in U.S. ski area visits during the 2025–2026 season from the prior 10-year average. It states that relatively low snowfall and warm winters are not explicitly recognized as disasters under federal law, but affected small businesses may be eligible for SBA Economic Injury Disaster Loans under certain drought-related disaster declarations. Expanding EIDL eligibility would require statutory and regulatory changes and raise questions about future costs, according to the report.

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“GAO-26-109126: SBA Disaster Loans: Assistance for Businesses Affected by Low Snowfall or Warm Winters.” Original at www.gao.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/gao-26-109126-sba-disaster-loans-assistance-for-businesses-affected-by-722bc849c5/, SHA-256 f7b4564d0368858467cbf115468908cc5253f11896e9da4d5f38cde9587b18d3.

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                      U.S. Government Accountability Office


SBA Disaster Loans: Assistance for
Businesses Affected by Low Snowfall or Warm
Winters
GAO-26-109126

Q&A report to Congressional Committees

July 14, 2026




Why This Matters           U.S. ski areas experienced a 9 percent decrease in visits (about 9 million visits)
                           from the prior 10-year average during the 2025–2026 season, according to
                           preliminary data from the National Ski Areas Association. Industry
                           representatives attributed the decrease to inconsistent snowfall and unusually
                           warm conditions across western states, which can cause precipitation to fall as
                           rain rather than snow.

                           Unlike many natural disasters, relatively low snowfall or warm winters cause
                           more economic than physical harm. For example, ski resorts, ice fishing
                           providers, and hospitality businesses that support those industries may
                           experience revenue losses because they are unable to operate or have
                           significantly fewer customers, rather than because their facilities sustain physical
                           damage.

                           Small businesses affected by relatively low snowfall or warm winters may be
                           eligible for certain types of federal assistance to help them recover economically.
                           For example, they may qualify for Small Business Administration (SBA)
                           Economic Injury Disaster Loans (EIDL), which provide necessary working capital
                           to help small businesses affected by a disaster meet financial obligations until
                           normal operations resume.

                           The Joint Explanatory Statement accompanying the Financial Services and
                           General Government Appropriations Act, 2026, includes a provision for us to
                           review how small businesses affected by relatively low snowfall and warm
                           winters can seek and receive federal relief. This report addresses the extent to
                           which these businesses may be eligible for assistance under the EIDL program
                           and policy considerations for Congress should it consider a potential expansion
                           of the program.



Key Takeaways              •   Relatively low snowfall and warm winters are not explicitly recognized as
                               disasters under federal law.

                           •   Small businesses affected by relatively low snowfall or warm winters may be
                               eligible for SBA EIDLs under certain drought-related disaster declarations,
                               depending on the circumstances.

Page 1                                                                              GAO-26-109126 Disaster Loan Program
                          •   Expanding EIDL eligibility for businesses affected by relatively low snowfall or
                              warm winters would require statutory and regulatory changes and raise
                              questions about future costs related to the federal government’s role in
                              disaster response.
.




Do federal disaster       Relatively low snowfall and warm winters are not included in the statutory
definitions capture       definition for “major disaster” contained in the Robert T. Stafford Disaster Relief
relatively low snowfall   and Emergency Assistance Act (Stafford Act) or the definition of “disaster” in the
and warm winters?         Small Business Act. 1 The Stafford Act defines a major disaster as a natural
                          catastrophe or, regardless of cause, any fire, flood, or explosion, which the
                          President determines causes damage of sufficient severity and magnitude to
                          warrant major disaster assistance under the Stafford Act to supplement the
                          efforts and available resources of states, local governments, and disaster relief
                          organizations in alleviating the damage, loss, hardship, or suffering caused
                          thereby. 2 Similarly, the Small Business Act defines a disaster as a sudden event
                          that causes severe damage. 3

                          While both acts include examples of qualifying disasters, neither act explicitly
                          includes relatively low snowfall or warm winters. In addition, low snowfall and
                          warm winters are not sudden events and typically do not cause physical damage,
                          which is the basis for requests for major disaster declarations under the Stafford
                          Act and the Federal Emergency Management Agency (FEMA) regulations
                          regarding federal disaster assistance. 4

                          However, small businesses suffering substantial economic injury related to these
                          weather events might be eligible for SBA assistance if located in a declared
                          disaster area due to drought, which is listed as a disaster type under these acts.

                          Drought generally refers to a deficiency of precipitation compared with normal
                          conditions over an extended period, usually a season or more, resulting in a
                          water shortage causing adverse impacts on vegetation, animals, or people.
                          Designations of disaster areas due to drought are traditionally made by the
                          Secretary of Agriculture, often through a nearly automatic process based on the
                          event’s severity.

                          For example, a designation of a disaster area for drought by the Secretary of
                          Agriculture is automatically triggered if, during the growing season, any part of a
                          county experiences a severe drought for at least 8 consecutive weeks or an
                          extreme drought for any length of time. An area can also be designated as a
                          disaster area for drought through a process initiated by a governor or the
                          governor’s authorized representative, an Indian Tribal Council leader, or a
                          County Emergency Board.

                          While the President can declare a major disaster or emergency due to drought
                          under section 401 of the Stafford Act, the President has denied requests for such
                          declarations since the 1980s, generally in deference to the Department of
                          Agriculture’s authorities. 5 A presidential declaration—stemming from a state’s
                          request for a declaration made through FEMA—that a drought has overwhelmed
                          state or local resources likely would trigger different types of federal aid, including
                          agricultural disaster assistance.

                          However, relatively low snowfall and warm winters may not be connected to a
                          drought. According to the American Meteorological Society, warm temperatures
                          may cause precipitation to fall as rain rather than snow or may contribute to
                          unusually early snowmelt. Neither situation necessarily results from a lack of
Page 2                                                                               GAO-26-109126 Disaster Loan Program
                                                 overall precipitation. In addition, reduced winter precipitation would likely not
                                                 trigger a drought designation by the Secretary of Agriculture if it does not occur
                                                 during the growing season.



When may an affected                             Small businesses affected by relatively low snowfall or warm winters may qualify
small business be                                for EIDLs associated with drought under an appropriate disaster determination. 6
eligible for SBA’s EIDL                          The Small Business Act authorizes SBA to provide loans to alleviate substantial
program?                                         economic injury under five types of disaster determinations (see table 1).



Table 1: Disaster Determinations Under Which the Small Business Administration (SBA) May Make Economic Injury Disaster Loans (EIDL)
 Determination type                 How is the determination                Examples of eligible disasters or SBA process for making EIDLs
                                    triggered?                              incidents                           available
  Presidential (major disaster)     Written request to the President        Hurricanes, earthquakes,            Automatic
                                    through the Federal Emergency           snowstorms
                                    Management Agency from a
                                    governor of a state or territory or the
                                    chief executive of a tribal
                                    government that the disaster
                                    exceeds the response capabilities of
                                    the state and affected local
                                    governments
 Secretary of Agriculture           Automatic drought declaration;          Drought, flooding, below-normal     Automatic
                                    recommendation from a County            temperatures, wind, excessive heat
                                    Emergency Board to a State
                                    Emergency Board and a Farm
                                    Service Agency State Executive
                                    Director; or written request from
                                    farmers, an Indian Tribal Council
                                    leader, or local governing body to a
                                    County Emergency Boarda
 Administrative (SBA Administrator) Written request from a governor (in Fires, tornadoes, or flooding that is Automatic upon SBA approval of
                                    conjunction with an approved            too small for a presidential        request
                                    governor’s certification that at least declaration
                                    25 homes, businesses, or other
                                    eligible institutions sustained
                                    uninsured physical losses of 40
                                    percent or more)
 Emergency involving federal        Federal government has primary          COVID-19 pandemic, terrorist attack Automatic
 primary responsibility             responsibility for the response or
                                    federal property is affected
 Governor’s certification           A governor’s certification that at      Bridge collapse, mass shootings,    Automatic upon SBA approval of
                                    least five small businesses in a        drought                             request
                                    disaster area have suffered
                                    substantial economic injury and
                                    need financial assistance not
                                    otherwise available on reasonable
                                    termsb
Source: GAO analysis of Small Business Act and implementing regulations. │ GAO-26-109126
                                                 a
                                                  A designation of a disaster area due to drought is commonly automatically triggered if, during the growing
                                                 season, any part of a county experiences a severe drought for at least 8 consecutive weeks or an extreme
                                                 drought for any length of time.
                                                 b
                                                  The governor must provide documentation supporting that conditions during the incident period meet or exceed
                                                 the U.S. Drought Monitor standard of “severe.” 13 C.F.R. § 123.3(a)(5). The U.S. Drought Monitor depicts the
                                                 location and intensity of drought across the country using five classifications: Abnormally Dry (D0), showing
                                                 areas that may be going into or are coming out of drought, and four levels of drought (D1–D4). Under a severe
                                                 drought, crop or pasture losses are likely, water shortages are common, and water restrictions are imposed.
                                                 The U.S. Drought Monitor is a joint effort of the National Drought Mitigation Center, Department of Agriculture,
                                                 National Oceanic and Atmospheric Administration, and National Aeronautics and Space Administration.



                                                 According to SBA officials, SBA is sometimes able to assist small businesses
                                                 affected by low snowfall or warm winters through a drought declaration because
                                                 those events often occur simultaneously with a drought.
                                                 For example, in March 2024, SBA advised affected small businesses in
                                                 Michigan, Minnesota, and Wisconsin that they could apply for EIDLs for drought
Page 3                                                                                                                        GAO-26-109126 Disaster Loan Program
                      if they suffered financial losses the previous winter directly related to multiple
                      drought declarations. 7 The Secretary of Agriculture issued these drought
                      declarations between July 2023 and February 2024, and the related EIDL
                      application deadlines had not closed. 8
                      Many affected small businesses that may be eligible for EIDLs because of an
                      existing drought declaration may not realize such assistance is available.
                      According to SBA officials, many business owners who may be eligible for
                      assistance do not associate "no snow" with "drought" and therefore may not
                      apply for available EIDL funds.



What policy issues    Certain changes could expand access to the EIDL program for small businesses
could Congress        affected by relatively low snowfall or warm winters, but these changes would
consider regarding    involve important policy considerations for Congress.
expanding access to
                      For example, Congress could add relatively low snowfall and warm winters as
affected small
                      eligible disaster types to relevant statutory frameworks and establish criteria for
businesses?           determining when such conditions accordingly qualify for assistance. As
                      discussed above, these conditions are not currently included among the types of
                      disasters for which SBA may issue administrative declarations or for which the
                      President may declare a major disaster. Moreover, not all low snowfall or warm
                      winter events would trigger a drought declaration. As a result, statutory changes
                      would be needed to include these conditions, SBA’s implementing regulations
                      would need to be amended to include them, and regulations defining these
                      events for federal disaster purposes—and potentially the process of proving
                      harm and need for financial assistance—would need to be promulgated. 9

                      These steps would have financial implications and raise broader questions about
                      the federal government’s role in disaster response:

                      Financial impact. Borrowers are required to repay EIDLs. However, SBA’s
                      disaster loan program, which includes EIDLs, has historically been estimated to
                      have a lifetime cost to the government, largely due to defaulted loans. 10
                      Increased use of the program could require Congress to provide additional
                      subsidy funding to support additional loans to small businesses or appropriations
                      to address increased SBA workforce demands.

                      Expanded federal role in disaster response. Providing loans for economic
                      injury to small businesses affected by relatively low snowfall or warm winters
                      could create a precedent to provide federal support for businesses adversely
                      affected by other weather variations, such as extended heat waves that limit
                      outdoor recreation activities. Over time, this support could increase federal fiscal
                      exposure and put a strain on resources.



Agency Comments       We provided a draft of this report to SBA, the Department of Agriculture, and the
                      Department of Homeland Security for review and comment. SBA and the
                      Department of Homeland Security provided technical comments, which we
                      incorporated as appropriate. The Department of Agriculture did not provide any
                      comments on the report.




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How GAO Did This     To describe the extent to which small businesses affected by relatively low
Study                snowfall or warm winters may be eligible for EIDLs and policy options and
                     considerations for Congress, we reviewed the Small Business Act, the Stafford
                     Act, and their implementing regulations. We also reviewed the Department of
                     Agriculture’s documentation on its drought-declaration process. We interviewed
                     officials from SBA offices primarily responsible for the disaster loan program and
                     reviewed selected SBA disaster press releases advising small businesses
                     affected by lack of snow about the availability of EIDL assistance. We
                     interviewed FEMA officials from the office that oversees the agency’s disaster
                     response.
                     We conducted this performance audit from April 2026 to July 2026 in accordance
                     with generally accepted government auditing standards. Those standards require
                     that we plan and perform the audit to obtain sufficient, appropriate evidence to
                     provide a reasonable basis for our findings and conclusions based on our audit
                     objectives. We believe that the evidence obtained provides a reasonable basis
                     for our findings and conclusions based on our audit objectives.



List of Addressees   The Honorable Bill Hagerty
                     Chair
                     The Honorable Jack Reed
                     Ranking Member
                     Subcommittee on Financial Services and General Government
                     Committee on Appropriations
                     United States Senate
                     The Honorable Dave Joyce
                     Chairman
                     The Honorable Steny Hoyer
                     Ranking Member
                     Subcommittee on Financial Services and General Government
                     Committee on Appropriations
                     House of Representatives


                     We are sending copies of this report to the appropriate congressional
                     committees, the Secretary of Agriculture, the Secretary of Homeland Security,
                     and the Administrator of the Small Business Administration. In addition, the
                     report is available at no charge on the GAO website at https://www.gao.gov.



GAO Contact          For more information, contact: Courtney LaFountain, Director, Financial Markets
Information          and Community Investment, LaFountainC@gao.gov.

                     Media Relations: Sarah Kaczmarek, Managing Director, Media@gao.gov.

                     Congressional Relations: David A. Powner, Acting Managing Director,
                     CongRel@gao.gov.

                     Staff Acknowledgments: Marshall Hamlett (Assistant Director), Daniel Newman
                     (Analyst in Charge), Daniel Horowitz, and Jennifer Schwartz.

                     Connect with GAO on Facebook, X, LinkedIn, Instagram, and YouTube.
                     Subscribe to our Email Updates. Listen to our Podcasts.
Page 5                                                                       GAO-26-109126 Disaster Loan Program
           Visit GAO on the web at https://www.gao.gov.

           This is a work of the U.S. government but may include copyrighted material. For
           details, see https://www.gao.gov/copyright.




Endnotes
           1The Stafford Act establishes the programs and processes through which the federal government

           provides major disaster assistance to state, local, and tribal governments and individuals. 42
           U.S.C. §§ 5122(2), 5170. When a major disaster is declared, FEMA—within the Department of
           Homeland Security—is the lead agency for coordinating response efforts. The Small Business Act
           authorizes SBA’s disaster loan program, including the EIDL program. Small Business Act § 7(b), 15
           U.S.C. § 636(b).
           242 U.S.C. §§ 5122(2), 5170(a). Examples of major disasters listed in the Stafford Act include

           hurricanes, earthquakes, snowstorms, and drought.
           3Disasters listed as examples in the Small Business Act include floods, hurricanes, tornadoes,

           earthquakes, fires, explosions, volcanoes, windstorms, landslides or mudslides, tidal waves,
           commercial fishery failures or fishery resource disasters (as determined by the Secretary of
           Commerce under the Fishery Resource Disasters Improvement Act), ocean conditions resulting in
           the closure of customary fishing waters, riots, civil disorders or other catastrophes, but do not
           include economic dislocations. Small Business Act § 3(k)(1), 15 U.S.C. § 632(k)(1).
           4A governor of a state or chief executive of an affected Indian tribal government must make a

           request to the President for a major disaster declaration. 42 U.S.C. § 5170. States conduct a
           preliminary damage assessment which serves as the basis for a Governor’s request to the
           President to have a disaster declared as a major disaster. 44 C.F.R. § 206.33.
           5Congressional Research Service, Drought Response and Preparedness: Policy and Legislation,

           IF10702 (Washington, D.C.: Jun. 4, 2021).
           6SBA’s size standards define whether a business is “small.” Size standards have been established

           for types of economic activity, or industry, generally under the North American Industry
           Classification System. 13 C.F.R. § 121.101. EIDLs can be up to $2 million and have terms of up to
           30 years. Small Business Act § 7(b), 15 U.S.C. § 636(b). Businesses may also be eligible for
           disaster assistance through the Department of Agriculture, depending on the type of business.
           7Small Business Administration, Michigan Businesses Affected by Lack of Snow Can Apply for

           Working Capital Loans from the SBA, 24-266 (Washington, D.C.: Mar. 18, 2024); Minnesota
           Businesses Affected by Lack of Snow Can Apply for Working Capital Loans from the SBA, 24-267
           (Washington, D.C.: Mar. 18, 2024); and Wisconsin Businesses Affected by Lack of Snow Can
           Apply for Working Capital Loans from the SBA, 24-268A (Washington, D.C.: Mar. 19, 2024).
           8Businesses have 8 months from the date of the Secretary of Agriculture’s approval of the disaster

           declaration to apply for EIDLs.
           9Legislation was introduced in 2024 and 2025 that would have modified the definition of a disaster

           in the Small Business Act to include “relatively low snowfall or snow cover.” This change would
           have authorized the SBA Administrator to declare a disaster due to reduced snow and make
           affected businesses eligible for EIDLs. The legislation also would have required SBA to work with
           the National Weather Service to develop implementing regulations.
           10The estimated lifetime cost to the government is reported as the subsidy rate. It is calculated on a

           net present value basis and expressed as a percentage of total dollars disbursed. The subsidy rate
           represents the sum of defaults net of recoveries, interest, fees, and other components. The
           estimated initial subsidy rates for the disaster loan program were 20.55 percent in 2024 and 22.22
           percent in 2025. Office of Management and Budget, Federal Credit Supplement, Budget of the U.S.
           Government, Fiscal Year 2027 (Washington, D.C.: Apr. 3, 2026).




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