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C-Suite Wednesday – How the SBA Shutdown Affects SBA Services

January 23, 2019

By Mary Miller
Contributing Editor, C-Suite Wednesday

C-Suite Wednesday – How the SBA Shutdown Affects SBA Services

As the SBA Shutdown continues, there are both immediate and long-term implications for more than ceasing to issue SBA loans.

Main Street is not alone in feeling the pinch of what may turn into a full-blown government shutdown. Many branches of the Small Business Administration face serious consequences, as well.

The shutdown is not only affecting small business owners, but the very SBA offices that administer funding, support, training services and development are also in jeopardy of closing their doors.

Without funding, awards or reimbursements, here are some of the SBA branches, services and organizations that are affected:

  • SBIC Program (Investments)
  • SBA’s Entrepreneurial Development Programs

1. Small Business Development Center (SBDC)
Offices located in each state providing SBA-partnered and funded small business services

2. Women’s Business Centers (WBC)
Approximately 100 offices nationwide provide business training, education and counseling to women-owned small business start-ups and growth opportunities

3. Service Corps of Retired Executives (SCORE)
300 chapters nationwide provide business training, counseling and assistance to entrepreneurs and small business owners

4. Veterans’ Business Outreach Center (VBOC)
Provides eligible veteran entrepreneurs with business development services including training and mentoring

5. Procurement Technical Assistance Centers (PTAC)
Offers technical training and counseling regarding procurement of products and services to government agencies

As the potential for a full-blown government shutdown is looming, the most obvious impact for all SBA-funded small businesses is the inability to receive approval on SBA loans.Based on SBA weekly lending data, projections look something like this:

  • 7(a) Loan Program / Community Advantage Program
    Reduces access to capital by approximately $90 million per day, or 192 small businesses per day.
  • 504 Loan Program
    Prevents disbursement of approximately 117 loans per week, or a weekly total of over $102 million.
  • Microloan Program
    Serves underserved areas with capital and technical assistance. The shutdown completely prevents SBA from processing disbursements.

One of the biggest and possibly most costly concerns can be summed up with one question. How much will the drop of small business owner confidence levels really cost?

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