The government shutdown has closed the pipeline for many people with great ideas who only waited for funding to come through to get them off the ground. These small businesses may rely on government-backed loans to get started, as in the initial phases of their business venture, their creditworthiness may be limited, questionable or nonexistent. Since Calvin Coolidge said, “The business of America is business,” the government’s small business loans are a critical cog in entrepreneurship on small levels around the country. Although lenders will, according to the WSJ, “continue to process and submit loans” to the small business administration, borrowers will just have to wait, high and dry.
One person who has been affected in cross department shutdown problems is Charlotte Calmels. She is a restaurateur opening a second restaurant in Philadelphia in November. To carry out her plan, she has been helped with a $150,000 loan from the small business administration. Her lender however, Susquehanna Bank, from Lilitz, Pennsylvania has to first confirm her legal status as an immigrant. The confirmation has to go from the SBA to the federal immigration agency. That agency, while open, has “stopped receiving requests from the SBA to verify borrowers’ immigrations statuses” as of last Tuesday. So this person, who would have added to the local and regional economy and added possible more than one or two dozen or so jobs into Philadelphia, now is stuck. Ms. Calmels understands that the government shutdown will cause critical delays for her. She noted that while she holds the keys to her new place, it won’t open with hired employees until she has the money to pay their wages.
While this was only one testimony from someone affected by the SBA and government shutdown, many more people are now scrambling to get loans for their ideas that would definitely add to the economy and create jobs.