The federal government shut down this morning and will stay closed until Congress can come to an agreement on how to fund day-to-day operations. How will this shutdown affect small businesses? The biggest impact could be on financing. According to The Washington Post, “The Small Business Administration has provided guarantees for some $106 billion in loans to more than 193,000 small businesses over the last four years. It also runs programs to help small firms win government contracts, help veteran-owned businesses, and boost international trade.”

The Post goes on to say, “All that would cease in a shutdown. Although the SBA would continue to back existing loans in its portfolio, it wouldn’t initiate any new loan guarantees. The one exception here is the Disaster Loan Program, which steps in during natural disasters and other emergencies — that would continue to operate.”

If your small business contracts with the federal government you will also experience an impact. Bloomberg Businessweek reports, “Contractors will have to manage cash flow as payments for government work may be delayed or canceled outright.” They go on to say, “The timing of the current shutdown is especially disruptive, says Rebecca Rubin, chief executive officer of Marstel-Day, a 130-employee environmental consulting firm that contracts with federal agencies to turn shuttered military bases into parkland. Many federal contracts are scheduled to start today, Rubin says, as the government’s fiscal year begins on Oct. 1. “Technically, you can’t start a project until you have a kick-off meeting,” she says. “If there’s no one from the government to talk to, there’s only so much work you can do.”

Will your small business be impacted by the shutdown? Share in the comments.

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