Warner highlights concerns with loan backlog created by Trump Shutdown
The 35-day lapse in appropriations jammed the approval process of SBA loans—a particularly alarming fact for Virginia, where 1.5 million individuals, nearly half of the Commonwealth’s employees, are employed by small businesses.
“I fear the fallout from the Administration’s 35-day shutdown will slow Virginia’s economic growth and innovation,” wrote Sen. Warner. “According to some estimates, the shutdown delayed about $2 billion in SBA lending and more than 300 small business loans per day. A backlog of loan applications could have a chilling effect on small businesses’ confidence, investment, and hiring.”
According to SBA’s shutdown contingency plan, more than 2,000 SBA positions were subject to furlough, freezing essential loan programs that allow individuals to start or expand businesses, make essential repairs and refinance debt. SBA loans are vital contributors to innovation and growth and have been used by the founders of companies like Under Armour, Chipotle and Apple to kick-start their businesses.
“News reports shared the stories of small business owners who had to cancel SBA-financed expansion plans because of the shutdown, as well as entrepreneurs who were unable to access SBA loans to open their businesses,” Sen. Warner continued. “Throughout the 35-day period, Americans hoping to obtain an SBA loan to start or expand their small business had to put their ambitions on hold — or turn to more costly capital alternatives— while they waited for the government to get its act together. I am deeply concerned with backlog left for SBA employees now that the shutdown is over, and other impacts the lapse in funding had on SBA’s vital functions.”
In his letter to SBA Administrator Linda McMahon, Sen. Warner asked for information in order to evaluate the shutdown’s lasting damage on small businesses. Specifically, he requested a list of all functions that were reduced or postponed. He also asked about the number of loan applications in the backlog and about SBA’s plan to address this backlog.