The ongoing federal government shutdown is costing small businesses in Pennsylvania approximately $26 million each week in blocked funding. This figure comes from a recent analysis by the U.S. Small Business Administration (SBA), which highlights the significant impact of the funding lapse on local economies. The shutdown has halted the agency’s core 7(a) and 504 lending programs, crucial for many entrepreneurs.
According to the SBA’s report, published on October 3, 2023, the freeze is affecting 54 small business loans in Pennsylvania alone each week, totaling $25,961,288. Nationwide, roughly 320 small businesses are unable to secure about $170 million in SBA-backed loans every day. These funds are essential for businesses seeking to open or expand operations, purchase equipment, or cover payroll costs.
The SBA emphasizes that its loan programs are funded entirely through lender fees and do not incur any cost to taxpayers. Before the shutdown, the agency had guaranteed a record 84,400 loans worth $45 billion for fiscal year 2025.
In a statement, SBA Administrator Kelly Loeffler attributed the surge in small business optimism to President Trump’s policies aimed at reducing taxes and regulations. She stated, “Thanks to President Trump’s agenda to reduce taxes, regulation and unfair trade deals, small business optimism is at seven-year highs.” Loeffler criticized Senate Democrats for what she described as a decision to halt the momentum and capital necessary for Main Street businesses, opting instead to support increased government spending of $1.5 trillion and blocking essential funding measures.
The ramifications of the shutdown are dire, with many small businesses facing the potential for reduced hours, layoffs, or even permanent closure if the situation persists. This report illustrates that the economic impact of the shutdown extends well beyond the political sphere, affecting local economies across all 50 states. Pennsylvania ranks among the top 10 states most adversely affected by the freeze in SBA loan approvals.
For business owners seeking assistance during this challenging time, the SBA advises visiting sba.gov/disaster for updates and available disaster assistance resources. As the shutdown continues, its effects on small business funding highlight the interconnectedness of federal policy and local economic health.
