The longest government shutdown in modern U.S. history is choking the economic lifeblood of many entrepreneurs, the Wall Street Journal reported. The Small Business Administration has stopped approving routine small-business loans that the agency backs to ensure entrepreneurs have access to funds, halting their plans for expansion and repairs and forcing some owners to consider costlier sources of cash. SBA loans are a mainstay for many entrepreneurs, who generally can borrow as much as $5 million to start, buy, expand or run a small business through the agency’s two biggest programs. While the SBA doesn’t directly fund small-business owners, it covers as much as 90 percent of loan losses, giving an incentive to banks and other financial institutions to finance businesses they might not otherwise serve. Lenders say they are still taking loan applications and closing loans that have already received SBA approval. But it isn’t clear when borrowers will get financing. “About half the loans going through due diligence now aren’t going to be able to close before the government opens up,” said John Moshier, president of small business lending at Ready Capital Corp., a licensed nonbank SBA lender in New Providence, N.J.
