Signs are pointing to a potential federal government shutdown in October 2023 due to a lapse in government funding. While Congress is trying this week to pass a stop-gap temporary funding measure to keep the federal government open, the clock is ticking as we quickly approach the end of the federal fiscal year.
As Congress works toward a solution, here’s what you and your clients may want to do right now to prepare, plus some vital resources to carry you through this uncertain time.
How might a federal government shutdown affect you firm and your clients?
As a federal agency, the Small Business Administration (SBA) could be impacted by a shutdown, which potentially can restrict access to capital for small businesses. In accordance with the agency’s most recent contingency plan, in the event of a shutdown, the SBA stops approving and processing new loans for many of its loan programs including 7(a) and the microloan program. Disaster assistance funding, however, would still move forward under this plan as well as Economic Injury Disaster Loans (EIDL). For a full list of impacted programs and services, you may want to read the Agency’s most recent contingency plan.
A government shutdown may also impact the regulatory federal offices your clients rely on to obtain the certifications and approvals they need to operate. And employers hoping to hire new employees could hit a snag as they lose access to E-Verify, a federal internet-based system that determines employee eligibility to work in the United States.
Where can you find information about a potential shutdown and resources for relief?
- The Office of Management and Budget: Frequently Asked Questions
- The Small Business Administration: Contingency Plan for a Government Shutdown
- US Chamber of Commerce: Memo to chamber members on a potential extended government shutdown
- America’s Small Business Development Centers
What can you and your clients do right now?
If you are worried about a government shutdown potentially hurting your firm and your clients' businesses, a few precautionary measures could help you feel more prepared. Nevertheless, the situation is very fluid, and both chambers of Congress continue to negotiate a short-term spending measure with the goal of avoiding a shutdown.
Collect on outstanding invoices: Collecting on any outstanding invoices can give your cash flow the boost it needs to survive a shutdown. Do this as soon as possible to avoid a situation where your clients can’t pay, as well as your clients' customers. Here are 20 tips to get paid faster.
Reduce overhead costs: Pause or eliminate unnecessary expenses so you can direct your cash flow to the things that matter most, like employees. Here are 14 ways to reduce operating costs.
Build a cash reserve: It’s never too late to start saving for a rainy day. Set a monthly savings goal and treat it as a non-negotiable. Then, create strict guidelines for tapping into your reserve. Here are some tips for building a business cash reserve in a pinch.
Take out a private loan: Long-term SBA loans may not be an option in the event of a shutdown, but a short-term private business loan can help if you or your clients run into trouble. Here’s everything you need to know about small business loans.
Talk to your vendors: If you find yourself unable to pay your bills for any reason, explain the situation to your vendors and ask to work out a payment plan. They may be willing to accommodate. Here’s your guide to working with vendors and suppliers.
Browse additional resources on the Firm of the Future blog
- How to recession-proof your business in 2023
- Marketing during an economic downturn
- Putting your clients on the road to positive cash flow
- Help. your clients manage their cash flow and better sync their finances with QuickBooks
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