Shutdown Slowdown: How to Keep Your SBA Deal on Track

As the federal government shutdown continues, small business owners and entrepreneurs pursuing SBA loan financing are facing a wave of uncertainty. With SBA loan processing and approvals temporarily halted, many deals are in limbo—especially those targeting a year-end close. But while the shutdown has paused federal operations, it has not paused your ability to prepare, position, and push forward.

The Current Landscape: SBA Lending on Pause

During a government shutdown, the SBA (Small Business Administration) ceases most operations, including loan approvals, 504 debenture funding, processing of new applications, and communication with SBA loan officers and CDCs. This means that even if your lender is ready to move forward, they cannot obtain SBA authorization or finalize funding until the government reopens. For deals in underwriting or nearing closing, this creates a bottleneck—and once the SBA resumes operations, a backlog of files will flood the system.

What You Can—and Should—Do Now

Despite the shutdown, there is plenty of work that can and should continue. Here’s how to stay proactive:

1. Keep the Foot on the Gas

If your SBA deal is currently in underwriting or approaching closing, do not slow down. Continue working with your lender to finalize financial statements, respond to due diligence requests, secure third-party reports, and prepare legal documentation. The goal is to be 100% ready to submit the moment SBA operations resume. Files that are complete and lender-ready will be first in line when the backlog clears.

2. Year-End Closing? Act Immediately

If you need your deal to close before December 31st, your file should be in underwriting within the next week. While there may be exceptions, the reality is that files are stacking up, everyone wants to close by year-end, and the SBA will be overwhelmed when it reopens.

Action Step: Contact your lender today to confirm your file’s status and ensure it’s moving toward underwriting. If you haven’t started, you’re already behind.

Setting Expectations: Timelines & Deadlines

Here’s a practical timeline to help you plan:

Milestone: File into underwriting
Recommended deadline: By October 17
Notes: Ensure priority when SBA reopens

Milestone: Finalize due diligence
Recommended deadline: By early November
Notes: Allows time for lender review

Milestone: SBA authorization (post-reopening)
Recommended deadline: Late November - Early December
Notes: Subject to backlog delays

Milestone: Closing and funding
Recommended deadline: By December 31
Notes: Requires full lender and SBA coordination

Looking Ahead: Positioning for Success

While the shutdown is frustrating, it’s also an opportunity to get ahead. Business owners who stay proactive will be best positioned to beat the post-shutdown rush, avoid year-end bottlenecks, and maintain deal momentum.

Final Thoughts

The federal government shutdown has created real challenges for SBA borrowers, but it doesn’t have to derail your financing plans. By staying engaged, pushing forward with prep work, and meeting critical underwriting deadlines, you can ensure your deal is ready to move when the SBA reopens.

If you’re unsure where your deal stands or need help navigating this process, consult with your lender or legal advisor immediately. Time is of the essence—and preparation is your best defense against delay.

The information provided in this article is for informational purposes only and does not constitute legal advice. No attorney-client relationship is formed by virtue of this article. For specific legal advice related to your situation, please consult with a qualified attorney.