How to Get Business Loans Post Government Shutdown
A potential government shutdown may be devastating to small businesses and the economy, but there are options for those looking for funding and business loans, despite little-to-no access to SBA-backed funding.
The government may shut down Saturday because of failed federal budget talks. Entrepreneurs around the country may be sweating, wondering how this will directly affect their businesses if government agencies run out of funds.
“This could be devastating for many small business owners, and in turn the economy,” said Brock Blake, Lendio CEO. “Many entrepreneurs depend heavily on small business loans backed and processed by the SBA,” said Brock Blake, Lendio CEO.
Here are the details of how things will change if the shutdown happens, according to the Small Business Administration:
- There won’t be any new approvals of SBA-backed loans, such as 7(a) or 504 loans. Those loans must be approved by the SBA before they can be processed, and it can’t happen without funding.
- Applications submitted after Friday will be queued up for approval until there’s more funding.
- No new contracts will be awarded to business owners who are involved in federally contracted work.
- Those businesses already working on completing a government contract will be notified if it will continue or be suspended.
- Many SBA counseling outlets will be closed. Every SCORE office will close. Some SBDCs that get funding from a variety of other sources will remain open.
- SBA will continue to perform work required for the safety of life and property. So disaster-assistance loans for homeowners, renters and businesses will continue to be approved.
- The SBA will continue its secondary-market oversight operations to maintain the integrity of the financial system. Banks used this to sell loans to investors, which enables them to make new loans. A bank needs to get approval to sell any SBA loan, which is why this will remain open.
If this does happen, things will be more difficult for those in need of funding. But there is still hope. Many options are still out there.
“There are many lenders looking to lend to the right businesses,” Blake said. “Many banks, credit unions, and other nice lenders will lend without worry of the SBA.”
The good news is, not all small business loans are tied to the federal government via the SBA program. There are many active lenders that can provide other loan options such as equipment loans, merchant cash advance loans, small business credit cards and micro loans.
Blake’s company, Lendio, is a good option for small businesses searching for the funds to help their business grow. This year, Lendio launched an online platform that matches business owners with the right loan types and lenders.
“In this time of uncertainty, it can be very difficult to sift through all the options out there that might meet your needs,” Blake said. “Lendio will help entrepreneurs find those options without the hassle – despite a government shutdown.”
Lendio makes small business loans simple by matching qualified small business owners with active banks, credit unions, and other lending sources. Through a proprietary matching technology, Lendio assists a business owner to identify the business loan category and specific lenders that offer the highest probability for that business owner to prepare for and secure a business loan approval. Lendio formerly operated as FundingUniverse.com. For more information, contact Lendio at press(at)lendio(dot)com.