When SBA Loan Programs Pause: What Business Owners Should Know
By Brian Cassidy
The recent federal government shutdown has temporarily halted new loan approvals through the U.S. Small Business Administration (SBA), including its flagship 7(a) and 504 programs. While this pause may be temporary, it carries real implications for small businesses, lenders, and buyers or sellers who depend on SBA-backed financing.
At Keystone, our team of CPAs, Wealth Advisors, and Business Brokers is monitoring this closely. Whether you’re in the middle of a transaction, preparing to sell, or planning for growth, understanding how this impacts capital access is key to staying ahead of potential delays.
What’s Happening
Due to the funding lapse, the SBA has suspended new loan approvals and limited many of its normal operations. Loan applications already assigned a number may still move forward, but most new requests are on hold until Congress restores appropriations.
The SBA’s own contingency plan outlines that only “excepted” functions — like disaster assistance and minimal IT/security operations — will continue during the shutdown. That means programs that drive much of America’s small business growth are effectively paused.
Why It Matters
- Financing Delays: The SBA lending freeze is estimated to delay hundreds of millions in small business loans each day.
- Impact on Transactions: For buyers planning to use SBA financing to acquire a business, approvals and closings could be pushed back. For sellers, that may mean adjusted timelines or alternative deal structures.
- Local Market Effects: Here in Northern Nevada, where SBA loans often support acquisitions, expansions, and start-ups, lenders may temporarily tighten or suspend underwriting activity tied to SBA programs.
What Business Owners Can Do Now
- Stay Prepared. If you anticipate needing SBA-backed financing, use this time to get your financials in order — tax returns, profit and loss statements, projections, and supporting documents. The more ready you are when the programs resume, the faster your approval will move.
- Explore Alternatives. Keystone’s team can help assess other financing options — from conventional loans and seller financing to private capital or bridge solutions — depending on your situation.
- Communicate with Partners. If you’re buying or selling a business, talk with your lender, broker, and accountant early about how this temporary pause might affect your transaction’s structure or timing.
- Stay Informed. The SBA publishes regular updates on its website, including its official plan for operations during the shutdown.
Keystone’s Perspective
At Keystone, we understand that uncertainty around financing can create anxiety — especially when deals or growth plans are in motion. Our multi-disciplinary team brings together expertise in tax planning, financial strategy, and transaction advisory, so clients have a full-circle view of how events like this can affect their business goals.
Government actions are outside anyone’s control, but preparation and perspective are not. We’ll continue tracking developments and advising our clients on how to navigate these challenges with confidence and clarity.