With each passing day, the partial government shutdown is eroding confidence in the Small Business Administration.
Several industry experts say the SBA's inability to process and approve loan applications is creating a backlog while leaving small businesses scrambling for costlier alternative financing.
“It’s a bad situation and it’s only getting worse,” said Rohit Arora, CEO of Biz2Credit, who predicted a bigger backlash against the SBA the longer the impasse drags on.
“Depending on how long the shutdown is in effect, we could see some negative impact to the program and economy,” said Miguel Maldonado, senior vice president at the $9 billion-asset Randolph-Brooks Federal Credit Union in Live Oak, Texas. “The delay ... can affect small businesses and their ability to operate, or even get off the ground.”
Even in a best-case scenario, the agency would have to play catch-up when the shutdown, now nearly three weeks old, ends, said Arne Monson, president of Holtmeyer & Monson, which services more than $1 billion in SBA loans. Still, Monson said, his team continues to process and package deals so they can be submitted as soon as the impasse ends.
Read more in American Banker.