Enter your email address and start getting breaking law firm and legal news right now!
Government Shutdown Leaves Small Businesses Adrift
As lawmakers huff and squaw, the government is shut down and workers are on furlough. Congress has failed to get a budget together and the U.S. Small Business Administration cannot process new loans. The Government’s shutdown has impaired that agency’s ability to help starting businesses flourish. Right before the funding was cut and the blackout started, “bankers flooded the agency with loan-guarantee applications, and raced to secure funding,” according to the Washington Post.
President and CEO of the National Association of Government Guaranteed Lenders, which is composed of and represents around 750 small business lenders commented, “we could read the tea leaves and see we were headed this way, so lenders have been working overtime to get the applications done and in to the SBA.”
Members have submitted approximately $1.2 billion in loans over the past two weeks. That amount usually transpires in a month. As of 2pm Monday, the government agency approved in excess of $175 million in loan guarantee applications. Most days, around $75 millions would be approved. People were obviously responding to the urgency of the impending government shutdown. Regardless of the rush, many loan applications will be adrift. Many entrepreneurs with great ideas wont get their capital, cant expand or finance their business according to their needs.
“It’s going to be really tough,” he commented. Businesses need small loans and they get them from the SBA, and right now, “the government shutdown turns off that spigot.” He finalizes his somber thoughts as he comments, “real jobs and real economic growth hang in the balance.”
Image Credit: PolicyMic.com