Table of Contents hide Is your small business prepared for a government shutdown? Is your small business prepared for a government shutdown? Here are 5 Action steps to prepare now for the looming disruption of government services. On Friday, the government may shut down. Is your small business up to the challenge of the future? Make a concerted effort to obtain the services you require by Friday. Contact those agencies now if you need tax assistance, regulatory approval, project advice, or an SBA loan before they close. A government shutdown is once again looming in Washington. The shutdown is the same dance and song as in 2019, 2018, 2013, 1996, 1995, and three other times since 1980. The cause is the same: disagreements over the budget and how much the government spends. The federal government will stop operating unless the Senate can agree to raise the government’s debt limit, which is not likely. So, what impact does this have on small businesses? Many small companies that do business with the federal government may experience a temporary cash-flow shortage, whether indirectly or directly. We do, however, have some experience in this area, and as a result, we are aware that some businesses may be impacted. Because most payments due under federal contracts are halted during a shutdown, cash flow can be impacted. Any invoices that are due will be delayed until political differences are resolved if you work for the federal government directly or as a subcontractor on a federally funded project. Other small businesses providing services to a government-owned facility or agency, such as research, consulting, delivery, transportation, technology, landscaping, and construction work, may also have to wait. Government employees returning to work will almost certainly go on leave. Unfortunately, this means that small businesses in those areas that sell lunch, services, and other products to these workers during the workday will be out of business for the time being. Specific industries’ businesses would see a significant reduction in activity, if not a complete shutdown. If your company provides services to agencies and their employees in sectors like defense, agriculture, or tourism, you could be affected. Do you run a business that depends on immigrants? You’ll notice a reduction in available labor as the government’s processing services end. Small businesses that require government assistance would be caught in the middle as well. If the government shuts down, the federal government’s services to most companies will stop. If you need a passport, an OSHA safety inspection, a federal court decision, regulatory clearance on a product, or patent approval, or if you need assistance from the Internal Revenue Service, you might be spinning your wheels for a while. Finally, those seeking specific types of capital will have to wait even longer. Many of the Small Business Administration’s current activities will stop if the government shuts down. What this means is thousands of small business loans and grants for disaster relief, COVID assistance, working capital, and longer-term financing, as well as any other assistance the SBA provides, such as counseling and educational services, would be significantly delayed. What can you do to prepare if you know a government shutdown is on the horizon and could happen within days? The first piece of advice is to schedule your services by Friday. Contact government agencies as soon as possible if you require tax assistance, regulatory approval, project advice, or an SBA loan before they close. Prepare for your trip by thinking about your options ahead of time. Do you or your employees need a passport before Friday? If so, get in line as soon as possible. Allow extra time for longer security lines and flight times due to a potential TSA or air traffic controllers disruption in October. Double-check your cash. The most protracted government shutdown in history lasted thirty-five days in 2018-2019. Before that, it was twenty-one days in 1995-1996. This one could be a lot shorter if that happens. Possibly not. Going without cash flow from an existing customer who is reliant on federal government payments, on the other hand, could be disastrous. If you believe this will impact your business, speak with your banker as soon as possible or you can Apply Here for fast funding. Check your overhead, add up your savings, and make sure you have enough cash on hand to get you through until there is a resolution and payments resume. And, if history is any indication, everybody will come together to resolve the problem. Government shutdowns are something neither politicians nor the people they serve want. The election is coming up next year, and no one in Washington wants to be a member of a political party that has harmed the economy in the long run. All back payments and payroll will be made whole when the government reopens. But, until then, and while the drama in our nation’s capital continues, your business must be ready for the worst.
