SBA Halts Loan Programs as Shutdown Forces 23% Staff Furlough

SBA Prepares for Major Staff Furloughs

With the government shutdown underway, the Small Business Administration (SBA) is furloughing about 23 percent of its workforce. Out of roughly 6,200 employees, just under 4,800 will remain on duty, while nearly 1,500 are sidelined as agency funding lapses.

Core Loan Programs Paused

Several of SBA’s main lending programs have stopped. The 7(a) loan program, the 504 program, and microloans will not approve new applications or service existing ones. Procurement support for women-owned and service-disabled veteran-owned businesses is also frozen, cutting off new contracting opportunities.

Essential Services Continue

Not every function has shut down. The SBA will keep distributing disaster assistance loans, giving relief to communities hit by emergencies. Staff will continue handling forgiveness and repayment for pandemic-era loans, including the Paycheck Protection Program and the Economic Injury Disaster Loan program.

Innovation and HUBZone Programs Move Forward

The Small Business Innovation Research and Technology Transfer programs will still award grants to startups pursuing research and development. Native American-owned businesses will continue to receive support. The HUBZone program also remains open and will process new applications from businesses in historically underserved areas.

Programs on Hold

Other initiatives are paused. These include the 8(a) Business Development program, the secondary market loan program, and the Small Business Investment Company program. Many entrepreneurs now face delays in funding and contracting opportunities.

The shutdown leaves small businesses with limited options. Some essential services remain, but most lending and contracting programs are frozen until lawmakers reach a deal.

For a deeper dive into what’s at stake, you can read the full article by Melissa Angell at Inc.com.