have you been declined for an sba loan heres what to do
The U.S. Small Business Administration (SBA) is the government body tasked with aiding, counseling, protecting and assisting the interests of small business entities. Of late, this government agency has been very instrumental in connecting small business entrepreneurs with lenders to access funding. This is funding that is meant to help the small business entrepreneurs plan, start and grow their businesses. The ongoing government shutdown has led to the closure of many federal agencies including the SBA. The closing of this federal agency looking out for small business and its entrepreneurs is having a devastating effect on SBA loans. The dire situation is likely to get even worse as the government shutdown continues.
Millions of small businesses stranded
The closure of the SBA as a result of the government shutdown has left millions of small businesses and their entrepreneurs across the country stranded. The affected businesses are those that largely depend on government funding to meet their operational cost. This small business and their entrepreneurs have been left without cash and no means to obtain it.
Since these small businesses and their entrepreneurs have no cash, running their day to day operations has been quite challenging. Most of these businesses can no longer now meet their day to day financial obligations. With the fierce competition that is currently being witnessed in the business sector, things may not turn out okay for these small businesses as a result of this challenging position they are in. Some of the small businesses are losing clients as they cannot meet their orders as a result of lack of cash. These are clients that the businesses worked hard to get and may never come back again once they get another option.
Some of the one-time deals that these small businesses are missing out on are government contracts. Without SBA loans funding, these businesses are unable to match up to the competition offered by more established players and are therefore missing out on government contracts. By the time the government shutdown ends, these small businesses will have lost a lot of money and growth opportunities collectively.
Employees of the small businesses are also missing pay
It’s not only the federal workers who are going without pay as a result of the government shutdown. Small businesses are also unable to pay their employees as a result of their employers not being able to access the SBA loans. This is negatively affecting the morale of the employees of these small businesses. Most of the employees are frustrated as their families are suffering as a result of the government shutdown. Some unable to fuel their cars have been forced to find alternative means to get to work.
Since the SBA loans can’t be accessed at the moment by small businesses and therefore most of them can’t pay their workers, there is a devastating ripple effect on the economy. Consumer spending habits are now negatively affected. All of the employees of these small businesses are consumers in one way or another. With no money, they have no pay they have no money to spend on the good they are used to. The businesses that they have been promoting through their purchases have now also been caught up with the effects of the government shutdown on SBA loans.
A scramble for comparable alternative solution
To save their small businesses, entrepreneurs have been forced to look for alternatives to find funds to keeps the lights on. This has led to a scramble for comparable alternative solutions including funding products like small business loans and business lines of credit. As a result of their desperation, most entrepreneurs are settling for unfair terms just to secure this funding which may significantly affect their businesses growth.
The high interest rates in some of these loans that small businesses are running towards as a result of government shutdown coupled with the unfavorable repayment times could spell doom for them. It is likely that the repayment of these loans will significantly eat into the revenue of these businesses considerably hindering their growth. Even when they get the SBA loans after the government shutdown some of the small businesses may actually fail as a result of the devastating effects of the comparative alternative loans they are now running on.