How the Government Shutdown is Impacting Arizona Small Business
At first, we didn’t think it would come to this, right? Certainly, we thought, they would pull together at the last minute to avoid a Government shutdown. Then we thought, it will probably only last a few days, right? Ok, so we had it wrong, and here we are 16 days into the Government shutdown. We still don’t know when or how the shutdown will end, but whether it ends tomorrow, next week or next month, you need to keep your business moving forward. While there isn’t a lot we can do to stop the shutdown, there are some things small business owners should know and a few things you can do to minimize the impact of the Government shutdown.
Shutdown’s impact on organizations, services and places.
A great deal has already been written about the major organizations, services and locations affected by the shutdown and there are some excellent resources to find out more, so no need for me to repeat here. If do you have general questions, a recent article by CentreDaily is a right place to find information on the programs and services still open for business and those that are closed during the shutdown. I’m writing today to focus specifically on one of the most important services impacting the Arizona small business; SBA lending.
Shutdown’s Impact on SBA
The fallout from the shutdown that directly impacts small business is the halting of Small Business Administration (SBA) loan approvals. With both the SBA and IRS employees on furlough, lenders are not able to get credit approval and guarantee numbers from the SBA. They also can’t verify tax information with the IRS. What that means to small business in Arizona and around the country is no new loans until the Government is back up and running. And, even after the shutdown ends, it is likely business owners will experience delays in SBA loan approvals as the backlog gets cleared. Not to mention that we are going into the holiday season.
As a side note, the administration’s microloans are still being approved and processed as lenders don’t need SBA approval for these. The Microloan program provides loans up to $50,000.
So if you were planning to buy or lease that new equipment to take advantage of tax deductions this year, and you were thinking SBA loan, you may need to factor in longer approval times or look at alternatives. As a reminder, you can deduct the full purchase price of qualifying equipment and/or software up to $500,000.
If you need help in determining if this is a sound tax strategy for your business this year, I can help. You can find more information on my tax planning services.
We are all hopeful that the shutdown comes to a quick and positive end and that this unfortunate situation has not impacted your business. If you have been impacted and need some contingency planning, give me a call or contact me online.