The Shutdown’s Toll On Small Business
As many federal administrations resumed operations on Oct. 17, analysts began to calculate how much the U.S. economy suffered.
Accounting the economy as a whole, Standard and Poor’s estimated a loss of $24 billion, CNN Money reported. Prior to the shutdown, the company estimated a GDP increase of 3 percent for the fourth quarter. That number has since decreased to 2.4 percent, indicating a significant blow to growth due to the drama on Capitol Hill.
The negative impact to the economy hit small businesses particularly hard. Federal contractors found their businesses severely stunted as their projects were put on hold. The closure of national parks took a big toll on the tourist industry and businesses of every kind were affected by the halting of federal loans.
Economist Steve Morse from Western Carolina University estimated that the shutdown cost $33 million to businesses near the Great Smoky Mountains alone. The 800-square-mile park that stretches between Tennessee and North Carolina was forcibly closed during the shutdown. Many restaurants, hotels, shops and attractions depend on tourists for business.
Jeff Smith, owner of a hotel in western North Carolina, estimated a loss of $20,000, which is 10 percent of his annual revenue. “That money is gone. We can’t recover it this year and that’s a shame for a small business like ours,” said Smith.
The U.S. tourism association estimated that the industry nationwide lost $152 million each day the parks were closed, the Washington Post reported, which totals over $2.4 billion for 16 days.
“It would be pretty hard to overstate the adverse economic effects this shutdown of the government and the national parks have had on small businesses and entire communities,” said Keith Griffall, who runs a tourist company in Utah. Griffall emphasized that it is not simply the tour-operating firms that have suffered, but all small businesses who rely on patrons traveling to national parks.
“They are suffering, and many of their workers will not see the money come back. Those waiters, for example, they are not going to get back pay,” said Griffal. “It’s just one more devastating blow to small businesses throughout America.”
Businesses affected by the shutdown this October will be looking for ways to recoup their losses. Some may hope to fund improvements, increase hours of operation or expand services. Those in need of financing to make the investment can turn to a small business lender. Although federal lending proved unreliable during the shutdown, National Funding offers a variety of loans that are quick and easy to apply for.