The recent federal government shutdown has disrupted critical services for small businesses, but the U.S. Small Business Administration (SBA) is now ready to resume operations and inject much-needed capital back into the economy. The shutdown, which lasted 43 days, impacted the SBA’s ability to approve loans, costing the agency about $5.3 billion in funds that support more than 10,000 small business owners.
During fiscal year 2025, the SBA saw record demand for loans, guaranteeing approximately 84,400 7(a) and 504 loans and providing a whopping $45 billion to small businesses nationwide. This surge was driven primarily by a confident economic environment, including rising wages, increased private sector investment, and low inflation. However, the benefits of this economic growth were met with a significant setback as the lockdown halted approvals within critical loan programs that small and medium-sized businesses rely on for their expansion, hiring and operational needs.
“Thousands of American jobs and livelihoods have been put at risk during the longest shutdown in American history, causing suffering for everyone from our military communities to Main Street,” said SBA Administrator Kelly Loeffler. This loss of momentum is forcing many entrepreneurs to make difficult decisions, such as reducing employee hours or delaying expansion plans.
The immediate resumption of SBA programs means business owners will once again have access to financing options so they can hire, fund projects, or cover day-to-day operating expenses. Vital to small businesses, the 7(a) and 504 programs provide federally guaranteed loans critical to growth and sustainability.
As consumer confidence was high even before the shutdown, small business owners began preparing for future investments. However, as federal furloughs took effect, consumer spending declined in certain regions. This has affected federal contractors as well as small business owners, reportedly resulting in at least $12 billion in lost revenue from federal projects.
With the government in full swing, the SBA is prioritizing support to help small and medium-sized businesses regain vitality lost due to the shutdown. “Now that the shutdown is finally over, SBA is immediately resuming operations and quickly returning to its mission to support the Trump Administration’s historic economic growth agenda,” Loeffler emphasized.
What does this mean for small business owners moving forward? The resumption of SBA operations will provide entrepreneurs with access to capital previously unavailable and support growth strategies in an expanding economy. However, some businesses may struggle to deal with the backlog of pending loan applications due to demand during the lockdown. Business owners should actively communicate with their lenders and stay abreast of any updates from the SBA on loan availability and processes.
It is important for small businesses to take advantage of the loans available to them, considering how much they can contribute to employment and expansion investments. Restoring access to capital can expedite hiring plans, fuel growth strategies, and potentially stabilize businesses that have been negatively impacted by recent economic fluctuations.
For businesses that survived the lockdown, now is the time to look for expansion opportunities, including hiring new employees, expanding product lines, and investing in marketing efforts. Being prepared to take immediate action can set your small business up for long-term success as the economy continues to recover.
In an era where continued access to capital is aligned with broader economic goals, owners interested in obtaining financing through the SBA can benefit from both immediate support from their lenders and an understanding of both the opportunities and challenges that lie ahead. The SBA’s commitment to supporting small businesses remains steadfast, and this is a pivotal moment for entrepreneurs ready to take advantage of the recovery.
For more information about SBA’s operations and resources, see the official announcement. here.
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