How the 2018 Government Shutdown Affects Small Businesses
Beginning on Saturday, December 22nd, 2018 at midnight, the United States government began its second shutdown of the year. The shutdown, which came about as a result of the government being unable to decide on a spending deal, is still going strong well into 2019.
Federal agencies are closed, the economy is frozen, and federal and military personnel are not receiving pay. As a result, businesses and individuals that need government assistance during the shutdown may experience delays and setbacks until the government reopens. But, as a business owner, what things should you be aware of and prepared for during the shutdown?
How the Shutdown May Affect Your Business
The Small Business Association, or SBA, stopped processing new loans starting on the first day of the shutdown, December 22nd. They will not be processing loans until the shutdown is over. This means thousands of business owners aren’t receiving necessary funds to start or grow their businesses.
Businesses can’t hire new employees. The country’s E-Verify system, the system that lets businesses check eligibility of individuals to work in the US, is down. Businesses who are legally required to verify the status of their workers can’t do so, meaning these businesses can’t hire new staff.
The Department of State is affected by the shutdown, meaning individuals in need of a passport, visa, or other types of permits will have to wait until the shutdown is over. Any business owners or employees who were planning to travel internationally anytime soon may have to postpone.
Farmers can’t get loans from the Agriculture Department, which is also closed during the shutdown.
Businesses may experience delays in receiving tax refunds as the IRS suffers from employee shortages.
Other agencies and departments that have been forced to close during the shutdown include:
Securities and Exchange Commission
Private companies may be affected.
Alcohol and Tobacco Tax and Trade Bureau
Breweries may be affected.
Businesses that ship goods internationally will be affected.
Federally operated museums and national parks
Businesses that rely on tourism (restaurants, hotels, etc.) will be affected.
A comprehensive list of what will be closed and what will remain in operation can be found here.
Until the government can come to an agreement on a spending plan, it will remain in shutdown. However, once the shutdown is over and the government resumes business as usual, don’t expect things to go back to normal right away. It may take weeks or even months for every affected department, agency, and business to get all caught up and back on track.