Jan. 15–As the partial shutdown of the federal government enters its 25th day, the closure has created a small backlog of Small Business Administration loans, affecting more than 200 businesses nationally waiting on the loans, an SBA spokesman says.
The Small Business Administration typically handles about 200 loans daily for working capital via the SBA’s 7(a) program and another 120 loans for commercial properties through what the SBA calls the “504 program,” according to the Washington Post.
Jimmy Billimoria, an SBA spokesman, said Monday he couldn’t vouch for those numbers. But he acknowledged that the shutdown affecting about a quarter of federal government operations is having an impact on small businesses.
“The SBA continues to process 504 loans that were approved prior to Dec 22nd, and these loans will be funded,” Billimoria said. “For 7a loans (delegated and non-delegated), SBA stands ready to process the loans as soon as the lapse in appropriations ends.”
For loans considered “non-delegated,” the SBA has 278 loans that are awaiting processing, he added. But that amounts to just half a percent of all the 7a loans made last fiscal year, he noted.
“As has been the case in the past, once full operations are permissible, the SBA is well prepared to handle the incoming volume of the loan requests within a very short period,” he also said.
504 loans are typically bigger, up to $20 million or more, with advantageous fixed interest rates. The other loans, 7(a), are far smaller, with mostly variable interest rates.
U.S. Rep. Nydia Velazquez, D-N.Y., chairwoman of the House Committee on Small Business, recently wrote Linda McMahon, SBA administrator, asking about the shutdown’s impact.
“How does the SBA plan to address the loan backlog that will exist once the shutdown ends,” Velazquez asked in the letter.
“Once full operations are permissible, the SBA is fully prepared to handle higher volume of loan requests to satisfy any unmet demand,” Billimoria told the Dayton Daily News.
Closer to home, an area brewery is feeling the impact.
Breweries not only must apply for approval from the Alcohol and Tobacco Tax and Trade Bureau before they can start operations, they must get new beers approved through the bureau, the JournalNews is reporting. That is one of the offices shuttered during the shutdown.
So the shutdown is affecting Monroe-based Rivertown Brewing Co., which “launches new beers all the time,” said owner and brewmaster Jason Roeper.
“I’ve got a big investment just sitting there that I can’t get a label approval for,” Roeper told the JournalNews, which is part of Cox Media Group Ohio. “We had submitted everything before the shutdown happened and there’s a wait period.”
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