The government shutdown has taken a severe toll not only on government employees but a wide variety of Americans, including business owners. The Small Business Administration (SBA), a government entity, supports some of the most popular loan programs for small business owners. They also offer disaster relief loans for those in areas impacted by natural disasters, including hurricanes in recent years and the wildfires in California in 2018.
While the government is shutdown, many SBA employees have been furloughed or have been on unpaid duty, and arrangements have been made to be sure the bare necessities are being taken care of.
If you currently owe on an SBA loan or are waiting for funding to come through on a loan you’ve applied for, you likely have questions. Here’s what to do.
What to Do With Your SBA Loan
1. If you’re making payments.
You are still responsible for making your regularly scheduled payments while the SBA is shutdown. Your lender itself is likely still in business, though SBA employees may be furloughed or on unpaid duty, and your payments are still expected.
Don’t make the mistake of thinking your payments are on hold; they aren’t, and it’s as important as ever to make your payments on time. Late or missed payments can be major blows to your business credit score, and can jeopardize your chances of securing financing in the future.
2. If you’re waiting on your loan to be funded.
Due to the shutdown, more than $2 billion in SBA lending has been put on hold, essentially freezing those particular business activities as a result. Unfortunately, those loans will remain on hold until the government emerges from the shutdown and the individuals at hand are allowed to return to work.
Loans from the SBA are commonly used to purchase real estate or equipment. If your real estate or equipment purchase is on hold while you wait for funding to come through, take advantage of this time to continue negotiations.
If you have the chance to negotiate for a lower price, do your business and yourself a favor and go for it. Instead of sitting on your hands or simply “stalling”, you can put your business in a better position to succeed once the funding comes through.
3. If you want to apply for an SBA Loan.
Unfortunately, the SBA will not be accepting new loan applications during the shutdown. That means that your plans to make a particular purchase may be kept on hold while you wait for the opportunity to apply for a very favorable SBA loan, but it’s also an opportunity to prepare.
Use the extra time to gather the appropriate and necessary documentation you’ll need when the time comes to apply for the loan. Take a moment to check on your business credit score, and make plans to improve it if necessary.
You can check your business credit score for free with Nav, or you can be matched with other financing options that can help your business. This can be particularly helpful if you’re waiting on funding for a time-sensitive purchase, and the shutdown is blocking your funding from coming through.
The shutdown is certainly a source of frustration for many Americans, but this can be an opportunity to take steps that can help your business in the long run.
Take time to negotiate the price down on your major purchase if possible, saving yourself that much more when the time comes to pay on the loan. Get the proper documentation and information ready to go, and make sure your business credit is in ship-shape.
Ready to see your credit data and start building better business credit? Check Your Personal and Business Credit For Free (No Credit Card Required).