The government could shut down in just over 30 hours unless politicians can agree on a funding measure before the end of the day on Thursday.
The Senate could vote on a spending bill as early as Wednesday to avoid a shutdown, while the House works to schedule a vote to raise the debt ceiling.
If the funding is not approved on time, a government shutdown could begin as early as Friday, similar to what happened in 2019, 2018 and 2013.
This means that federal agencies, including the US Small Business Administration, would shut down or significantly scale back operations, and SBA loans pending approval would be further delayed.
It would be a bad time given that the SBA has already been criticized for its slow allocation of emergency COVID funding to small business owners. Part of the delay is because the loans require verification from the Internal Revenue Service, which is also said to be part of a government shutdown.
Every day counts for business owners who say they only have funding for a few more weeks or months after a year that included drastically reduced demand, labor shortages and problems with Supply Chain.
The SBA did not respond to multiple requests asking if it had a government shutdown plan or advice for loan seekers.
In a SBA Form As of the 2018 shutdown, the agency is telling its employees that unless they are excluded from the leave, they are not to perform any official duties.
“As of noon on the day of the shutdown, employees will no longer be allowed to use email from the SBA or other federal resources,” the note said.
A shutdown could significantly affect small business owners, not only those applying for the COVID emergency loans, but also those in the middle of the paycheck protection plan loan forgiveness process, Ben said. Johnston, COO of the New York-based small business lender. Kapitus. P3 loans offered to small business owners suffering from COVID-related losses were forgivable as long as the businesses met certain criteria.
Small businesses that are particularly short of funds should try to get the services they need from the SBA by Friday, he said. They may also want to seek help outside of the SBA.
“Other lenders can fill them until the close of closing,” said Johnston.
Kapitus, which has 325 employees, made $ 400 million in small business loans in 2020 and is on track to fund more than $ 500 million in 2021. It has approximately 7,000 active small business clients.
The SBA’s Economic Disaster Lending Program, which offers low-interest loans to businesses that have been affected by the COVID-19 pandemic, still has three months before it closes. The agency has approved 3.8 million EIDL loans totaling $ 268.1 billion as of September 23.
But thousands of EIDL loans are stuck in processing, especially those asking for reconsideration after being turned down for errors, like an incorrect zip code or a misspelled business name.
COVID EIDL consultant Trevor Curran said if a shutdown occurs, there is nothing loan seekers can do until it’s over. They will have to be patient unless they want to seek more expensive capital elsewhere, he said.
“These small business owners have been waiting for months, or more than a year, anyway, so another delay is, quite simply, another delay,” he said. “Their other financing options are limited to extremely expensive short-term working capital loans. “
Calling the SBA to try and get an application approved faster is a good idea but won’t do much, he said. And, unfortunately, business owners are used to delays, he said.
“People are so anxious and upset about [the ongoing delays] that closure is almost a secondary concern, ”he said.