The Small Business Administration has released a state-level analysis detailing the effects of the ongoing federal government shutdown, which has suspended the agency’s core 7(a) and 504 lending programs and disrupted access to capital for small businesses across the country.
How Many Small Businesses Are Affected?
According to the SBA, the shutdown has prevented an estimated 320 small businesses per day from obtaining $170 million in federally backed financing. Since the lapse in appropriations began, that figure amounts to approximately 4,800 small businesses nationwide unable to secure $2.5 billion in loans.
Both lending programs operate at no cost to taxpayers, as they are financed by lender fees. The 7(a) program supports general business financing such as working capital and expansion, while the 504 program focuses on long-term fixed assets like real estate and equipment.
In fiscal year 2025, the SBA guaranteed a record 84,400 loans worth $45 billion.
Economic Impact by State
The report provides a detailed state-by-state breakdown of unapproved or delayed SBA loans.
- California recorded the highest weekly impact, with 212 loans worth $126.9 million delayed.
- Texas followed with $88.9 million and Florida with $76.8 million in stalled lending.
- Other large states with significant weekly impacts on SBA-guaranteed loans include New York, Georgia and Illinois.
- Smaller states such as Vermont, Wyoming and West Virginia reported losses between $1.4 million and $1.6 million per week.
What Consequences Follow the Halting of SBA Loan Programs?
In a statement, SBA Administrator Kelly Loeffler combined praise for the administration’s policies regarding the small business climate and the current government funding situation with sharp criticism of Senate Democrats.
“Thanks to President Trump’s agenda to reduce taxes, regulation and unfair trade deals, small business optimism is at seven-year highs, resulting in the SBA serving a record 85,000 job creators with $45 billion in federally-backed loans – supporting historic hiring, expansion, and confidence on Main Street,” Loeffler said.
She then accused Senate Democrats of choosing to “cut off that momentum and that capital for Main Street,” arguing they blocked a clean funding bill in favor of “growing government spending by $1.5 trillion.”
The administrator concluded by warning about the severe consequences of the SBA loan programs being shuttered during the funding impasse: “With the SBA’s loan programs shuttered, thousands of small businesses are now unable to access the vital funding they need to survive, let alone thrive – and will soon begin cutting hours and benefits, laying off workers, and contemplating closing up shop for good.”
