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.”
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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.
Page 4 GAO-26-109126 Disaster Loan Program
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
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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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