Small businesses across the country are feeling the impact of the federal government shutdown, as the U.S. Small Business Administration’s (SBA) operations remain largely paused. As of today, only critical functions and disaster relief programs continue, leaving many entrepreneurs and federal contractors without access to funding or payments.
Bill Briggs, SBA Deputy Administrator, joins us on the latest episode of the SBA Update and reveals that, on average, 320 small businesses per week cannot secure SBA-backed loans. Additionally, Federal contractors are also unable to perform government work or receive payments, creating a ripple effect across the broader economy. The shutdown has now lasted 27 days, making it the second-longest in U.S. history. Economists estimate the pause is costing the economy about $15 billion per week and could affect 43,000 small business jobs over the course of a month.
Briggs notes that the shutdown interrupts a period of strong momentum for small businesses. For instance, prior to the shutdown, small business optimism had reached 72%, the highest in four years, and wages were rising faster than inflation. The SBA had also provided nearly $100 billion in capital in the previous year, including $45 billion in loans.
Despite SBA loan approvals being on hold, Briggs encourages small business owners to continue working with lenders and resource partners to develop business plans and prepare for future funding. However, loans approved before the shutdown can still proceed, although there is currently no plan to defer SBA-backed loan payments. The agency continues critical operations to protect federal funds and ensure lenders are paid.
“We’re hopeful that very soon the government will reopen and that we can figure out some path ahead to helping small businesses.”
Briggs states that the SBA is actively monitoring potential crises, including hurricanes, and stands ready to provide immediate assistance to affected businesses, as disaster relief programs remain fully operational.
Further, small business owners are advised to stay in contact with their lenders, who have access to SBA’s electronic systems and are best positioned to provide guidance. Once the government reopens, the SBA anticipates a backlog in loan processing but plans to resume full operations to support business growth.
Ultimately, Briggs hopes Congress will act soon to reopen the government, allowing the SBA to continue its work helping small businesses access capital, training, and growth opportunities. “There’s still a lot of reason for the small business sector to be optimistic,” he said.
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