What Happens to SBA Loans During a Government Shutdown?

As a small business owner, you’re all about progress. But what happens when something beyond your control hits pause—like a government shutdown? Especially when it involves something as important as a Small Business Administration (SBA) loan. Here’s everything you need to know to keep moving forward:

1. What Happens to SBA Loan Applications?

When the government shuts down, SBA loan processing often does too. No new approvals, no underwriting, just a standstill. For small business owners waiting for funding, it can be a frustrating roadblock.

Action Plan: Contact your banker. They’ll provide updates on the status of your application and what steps you can still take during the shutdown.

If you’re preparing to apply for an SBA loan, check out our guide on Preparing Your SBA Loan Application for tips to streamline the process.

2. Approved Loans Might Stall Before Closing

Even if your SBA loan is already approved, it might not close without the SBA’s final authorization. Shutdowns can delay critical signatures, keeping your funds out of reach.

What to Do: Prepare all your paperwork now. Once SBA operations resume, you’ll be ready to finalize your loan without delays.

3. How Timing Impacts Your Business Plans

If your business needs funding urgently, delays could affect cash flow, payroll, or planned investments. A shutdown can create timing challenges that ripple through your operations.

Smart Move: Talk to your banker about alternative funding options to bridge any gaps. Having a backup plan can keep your business running smoothly.

Key Takeaways:

• Yes, Delays Happen: Government shutdowns can pause SBA loan applications and closings.
• Stay Ahead: Prep your documentation now to avoid further delays once operations resume.
• Explore Alternatives: Consider other financing options to maintain cash flow and keep your business moving.

How Locality Bank Supports You During Uncertain Times

At Locality, we understand that unexpected delays can disrupt your plans. That’s why our team is here to guide you every step of the way. With local decision-makers and personalized service, you won’t be left in the dark.

Contact our SBA team to explore your options and keep your business moving forward.

Disclaimer: The information provided in this content is for general educational purposes only and does not constitute professional advice. Locality Bank makes no warranty, express or implied, nor assumes any legal liability or any responsibility for the accuracy, correctness, completeness, or any actions taken based on the information provided. Always consult a qualified professional for specific guidance related to your situation.