Small Businesses are Beginning to Feel the Pinch of Government Shutdown
As the partial government shutdown enters its fourth week, small businesses across the country are starting to feel the effects of the shutdown resulting in unnecessary uncertainty at the start of a new fiscal year. Keith Hall, president and CEO of the National Association for the Self-Employed (NASE), the nation’s leading advocate and resource for the self-employed and micro-business community, called on Congress and the White House to work together to end the shutdown on behalf of America’s small business community.
The Washington Post is now reporting that as of December 22nd, 2018, the Small Business Administration stopped processing new small business loans due to the government shutdown. Thousands of small business owners across the country are unable to receive critical funding to start and grow their businesses because of the partial-government shutdown. Even when full funding is restored, a backlog is likely. In fact, it is estimated that the current backlog of business loan applications could take weeks or even months to clear, leaving small business owners who were counting on those funds to grow or maintain their business in a state of purgatory.
“The negative consequences of one of the longest shutdowns in U.S. history is now fully impacting our country’s small business community,” said Keith Hall, President and CEO of the National Association of the Self-Employed. “From uncertainty around how the shutdown could impact delays in tax refunds small businesses were looking to invest from this year’s new tax law to the shuttering of the Small Business Administration impacting small business loans, America’s small businesses are on the front-lines feeling the adverse impact.”
Hall continued, “The government shutdown has created additional uncertainty during a critical time when small businesses are starting a new fiscal year. Small businesses must continue to abide by their tax obligations, including paying quarterly tax estimates and adhering to all filing deadlines. However, the federal government is unlikely to keep their end of the deal by processing tax refunds on time and providing small businesses access to critical answers they may have to questions about filing for the first time under the new tax law.”
During the shutdown, about 12 percent of IRS staff are expected to continue working, according to the agency’s lapsed funding contingency plan. This will result in the inability of such functions as staff being available to answer questions for small businesses filing for the first time under the new Tax Cuts and Jobs Act law going into full effect this tax year. It could also negatively impact the ability of IRS staff to process tax refunds in a timely manner, resulting in delays.
“During this critical time, the small business community should not be clouded in more uncertainty about their businesses; rather they should be preparing for how to grow and expand their operations in 2019 as a result of the money saved from passage of the tax reform law.”
Many business are responding to the negative impact of the shutdown on small businesses.
“The effects of this shutdown on American small businesses is absolutely devastating,” says StreetShares CEO Mark L. Rockefeller. “The SBA does incredible work for the small business community, not only through their loan programs but through their education, assistance, and resources. To see all of that get shut down is heartbreaking.”
This is where alternative lenders such as StreetShares come in.
“SBA loans are one of the best options for small business owners, and I will always encourage entrepreneurs to pursue them if possible,” Rockefeller continues. “However, sometimes business owners need alternative solutions in cases like this. This is where our Patriot Express® Line of Credit product really excels.”
The StreetShares Patriot Express® Line of Credit is a flexible small business funding option for amounts from $5,000 to $250,000. Business owners draw funds only when they need them, and only pay interest on the funds actually used. Lines of credit are a great option for times such as a government shutdown, when business owners need “bridge” money to keep business operations going while waiting for another loan to come through.
Rockefeller encourages business owners to give StreetShares a call if they’ve been affected by the SBA shutdown and need help figuring out their next steps.
“We all certainly hope that the shutdown ends quickly and the SBA can get back to providing all the great things they do for our small business community,” he says. “But in the meantime, our team is doing everything they can to help these entrepreneurs out. A government shutdown doesn’t mean we have to shut down the American dream.”
