How to Survive a Government Shutdown: A Small Business Guide from the U.S. Chamber of Commerce
The U.S. Chamber of Commerce is providing details about the potential impacts of a government shutdown and the implications for the business community and the economy.
When Congress did not reach an agreement on government funding by September 30, the government shut down.
The last government shutdown, from December 2018 to January 2019, was a partial one that lasted for 35 days, and analysts estimate it reduced economic output by $11 billion in the following two quarters, including $3 billion the U.S. economy never regained.
The information here may be helpful to small businesses.
U.S. Chamber letter to the Senate: A government shutdown hurts families, workers, and businesses of all sizes
Small Businesses That Are Federal Contractors
If you are a prime contractor with the federal government, look closely at the language in your contract related to work stoppage. The federal government cannot award contracts, modify them, or exercise options during a government shutdown. However, the actual work is expected to continue unless the contracting officer terminates the contract or puts it on a stop-work status.
If you are a subcontractor, contact the prime contractor as soon as possible. Find out what happens during a shutdown, whether work should continue, and especially what happens to you and your team when the prime contractor receives a stop-work order.
You can find more information on steps federal contractors should take to prepare for a government shutdown here.
Do Federal Employees Get Paid During Shutdown?
While many essential services like issuing Social Security checks, defending our borders, and maintaining our global military presence continue, most of the 2 million military personnel and over 2 million civilian federal employees do not receive paychecks until after the government reopens. Not getting a paycheck has a ripple effect beyond families’ financial pressures to a drop in spending, especially in communities with a heavy military or federal government presence.
Unfortunately, the retroactive pay federal employees receive when government reopens does not apply to workers at federal contractors.
Impact to Capital Markets and Small Business Lending
Financial markets stay open, but processing of Small Business Administration (SBA) loans will slow.
If you have an SBA loan, your repayments are still due, and it is a good idea to contact your lending institution and ask how the government shutdown affects your loan (SBA loans are provided through private lenders).
SBA is likely to continue to issue disaster loans, since they did so during the 2018-2019 shutdown, but you should expect new EIDLs (Economic Injury Disaster Loans) to be slow going.
Air Travel
Traveling for work? Check your flight status more often than usual because of delays and changes that may occur due to limited federal staffing in air traffic control. Once you confirm flight times, be sure to get to the airport early because the Transit Security Administration (TSA) will be short-staffed, too.
For additional information, support and resources, visit the U.S. Chamber of Commerce website at USChamber.com.