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After a banner year, many small businesses are becoming more cautious about their investment and hiring plans. Some are responding to early signs of slowing sales, while others fear that tariffs, unstable financial markets, the aftereffects of the government shutdown and other headwinds could damp economic growth in 2019, the Wall Street Journal reported. Economic confidence among small firms, which edged downward for much of 2018, in January reached its lowest level since President Trump’s election, according to a monthly survey of 765 small firms for the Wall Street Journal by Vistage Worldwide Inc. (Vistage polls firms with between $1 million and $20 million of revenue.) Just 14 percent of firms expect the economy to improve this year, while 36 percent expect it to get worse. Forty-two percent of those surveyed said the Trump administration had improved prospects for their business, down from a high of 52 percent in January 2018, and 34 percent said that it had no impact. Nearly one in four small firms surveyed by Vistage said that the Trump administration had hurt the outlook for their business.

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.

The partial government shutdown has left some companies unable to get a taxpayer identification number from the IRS, holding up routine business deals until the agency’s workers return, the Wall Street Journal reported. Andy Mattson, an accountant with Moss Adams LLP in California who advises Silicon Valley companies, said the number-issuing halt has delayed deals for startups, some of which are based offshore to prevent double taxation of investors. Without a tax identification number, a foreign startup can’t get bank accounts to receive venture-capital money or make crucial tax elections, Mattson said. The shutdown’s impact on small businesses reaches beyond the slowdown in new identification numbers. “We have a buyer, but the buyer can’t actually take ownership of the business,” said Thompson. “All our tax planning is done. We are retiring. We are trying to be done, but it’s not happening.” The IRS system is still processing online requests for new taxpayer identification numbers. Many businesses in the U.S. or a U.S. territory can use the online system. But paper applications that need to be processed by IRS workers are stuck for now. Physical applications are typically made by foreign companies and by some companies in complicated financial situations. The IRS has been operating with a skeleton staff since the shutdown started on Dec. 22. Just one in eight employees are working, largely to maintain computer systems and investigate crimes, according to the IRS’s shutdown plan. Under federal law, the IRS can generally still perform activities needed to protect life and government property, including tax revenue.

As the shutdown entered its 11th day on News Year's Day, there were signs the lapse was beginning to have an effect, not just on the hundreds of thousands of federal employees who have been furloughed or forced to work without pay but also on the businesses and industries that rely on them, USA Today reported. Though the impact was obscured by Christmas, when government offices were already scheduled to be closed, it may become more pronounced as much of the nation returns to work today. Some businesses are waiting on government loan approvals. Others, near federal buildings or national parks, are worried about losing their customer base. National parks remained open, though some reduced their services. Smithsonian museums in Washington, D.C., have accommodated visitors but are set to close this week. Social Security checks continued, and airport screeners remain at work.

Small businesses with less than $2.5 million in debt would be able to file bankruptcy more quickly and cheaply under bipartisan legislation teed up for consideration in 2019, Bloomberg Law reported. The bill (S. 3689, H.R. 7190) would add to the Bankruptcy Code a separate subchapter for small businesses. Small businesses, which account for 80 to 90 percent of business bankruptcy filings, would be treated more like individuals than corporate filers under the bill. Small business owners would find it easier to keep their ownership interests because a standing trustee would oversee every case, a procedural protection preferred by creditors. Advocates say the current Bankruptcy Code makes it difficult for small businesses to reorganize and forces them to use alternatives that often result in liquidation. “It’s a well-balanced bill that streamlines the process for small businesses that need it and increases recovery for creditors where it is used,” Professor Edward Janger, Brooklyn Law School, Brooklyn, N.Y., told Bloomberg Law. The bill’s sponsors include Sen. Chuck Grassley (R-Iowa), the departing chairman of the Senate Judiciary Committee, and Rep. Doug Collins (R-Ga.), who is expected to be the top Republican on the House Judiciary Committee next Congress. They were joined by Sheldon Whitehouse (D-R.I.) and David Cicilline (D-R.I.), who serve on the Senate and House Judiciary Committees respectively. The bill is likely to be reintroduced next year with many of the same sponsors despite House and Senate leadership changes, said Samuel J. Gerdano, executive editor of the American Bankruptcy Institute, Alexandria, Va. There’s a “good chance” that Collins will reintroduce the legislation, according to Collins' communications director.