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Further Impacts of Government Shutdown

Further Impacts of Government Shutdown

Among the first reported impacts to small businesses caused by the federal shutdown was the halting of federal loans and contracts. A few days later, however, even more effects have been felt. Business has slowed down near the nation’s capital and, as E-verify has been suspended, small businesses around the country are cautious to hire new employees.

Hurting the local economy

On Thursday, Oct. 3, President Obama spoke to a small crowd in Rockville Md., near the nation’s capital, about the adverse effects the shutdown has on the local economy, The Washington Post reported.

“Hundreds of thousands of Americans, a lot of whom live around here, don’t know when they are going to get their paycheck,” he explained. “And that means stores and restaurants around here don’t know if they will have as many customers.”

Standing next to the president were construction entrepreneurs Cidalia and Natalia Luis, who fear their business will diminish if the shutdown continues. A large portion of their clientele – federal government workers – will not be receiving paychecks to spend on new construction projects.

Hiring made more difficult

But the detrimental effects have not been limited to the D.C. area. Small businesses in the 22 states that require employers to use E-verify have been flustered as the federal electronic service for determining an employee’s work eligibility is among the programs that have been suspended.

Amid the confusion, the U.S. Citizenship and Immigration Services posted a notice on its website explaining that the “three-day rule” to submit a new hire is suspended. However, employers will likely need to screen new hires when the system returns. This means businesses could have employees on board for weeks before learning they’re ineligible to work. For some businesses, such as Ivory Homebuilders in Utah, hiring is not worth the risk, The Guardian reports.

“We have a fellow right now, waiting for us to extend an offer and we can’t,” said Ivory president Chris Gamvroulas.

As impacts of the shutdown continue to ring out, small businesses are seeking support. Federal lenders have withdrawn from the scene but small businesses can turn to alternative lenders for help. Getting a small business loan during the shutdown is possible through National Funding. Along with a variety of other financing services, National Funding is helping small businesses stay strong throughout the shutdown.

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