Government Shutdown Blocks Access to Loans for Small Businesses

The Small Business Administration shuttered new loan processing on December 22, leaving many retailers in limbo.
January 11, 2019

WASHINGTON, D.C. – As the federal government shutdown continues, thousands of small businesses have had their new loans held up, the Washington Post reports. The Small Business Administration hasn’t processed new loans since December 22, meaning owners can’t have access to the funds needed to launch or expand their business.
 
One such owner is Brooks Troxler, who runs Trox Tech in Charlotte, N.C. He’d planned to buy new property to expand his business, but the purchase is incomplete because of the shutdown. “I’m praying this shutdown ends quickly,” said Troxler, who has seven employees. “We were 99% done. We were at the finish line, and now it’s like they pulled me back.”
 
While the president and Congress continue to be at a standstill over the funding bill, businesses in areas with high numbers of federal workers and contractors are beginning to feel the pinch. And scores of other businesses are not receiving loans or payments owed by other firms.
 
“If it lasts longer than a month or so, we could see larger knock-on effects to private sector activity,” said Michael Feroli, chief U.S. economist for JPMorgan. “In the past, there has been a noticeable effect on measures of consumer and business sentiment.”
 
Retailers also can’t use the federal E-Verify electronic verification employment system because its website had been shut down. The government also announced that February SNAP benefits would be released early.

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