Published
November 14, 2023
The U.S. Chamber has consistently warned about the harm federal government shutdowns have on millions of Americans and businesses of all sizes around the country. Here’s a look at five ways a government shutdown could affect you and the small businesses in your community — and what you can do to prepare.
Small businesses could lose $100 million in loan financing per day.
A shutdown would mean the U.S. Small Business Administration (SBA) would stop processing most new business loans for small businesses.
The effects on small business could be substantial. American small businesses would lose $100 million in financing each day during a government shutdown. For instance, if the government were to shut down for 10 days, small businesses would miss out on $1 billion in financing.
Small businesses without access to SBA financing would be less likely to purchase new equipment, hire new employees, or invest. Essentially, their plans to grow their business would be put on hold. They’re also likely to miss out on new business deals and opportunities.
This could have devastating ripple effects on other small businesses and the communities they support.
Make extra time for your vacation plans—and cancel your national park visit.
During past shutdowns, there have been major impacts on both international and domestic travel.
First, if you’re planning to travel internationally in 2024, make sure you budget extra time to process and renew your passport. In past shutdowns, 200,000 U.S. applications for passports reportedly went unprocessed, and U.S. tourist industries and airlines reportedly sustained millions of dollars in losses. So, you might want to double-check the expiration date on your passport now.
This also holds true if you’re expecting a visit from some foreign countries: Approximately 20,000-30,000 applications by foreigners for visas reportedly go unprocessed each day of a shutdown.
In case of shutdown, it’s also a good idea to arrive extra early for all flights (foreign and domestic) because the Transit Security Administration (TSA) may be short-staffed. Based on past history, the Department of Homeland Security is warning travelers to be prepared for longer wait times and airports operating with much leaner staff.
Secondly, if you’re planning on going to the Grand Canyon—or any other national park—you probably want to reschedule. The Department of the Interior (DOI) paints a pretty bleak picture: major closures, sanitation services suspended, and thousands of park rangers furloughed.
Expect more delays as infrastructure paperwork piles up.
A government shutdown can extend the length of time it takes for infrastructure projects to get through approval processes. Without funding for this paperwork to be processed, you could be stuck in traffic.
A shutdown could create delays in Environmental Protection Agency and DOI environmental reviews. With permitting disrupted, no USDA loans or grants would be made for modernizing utility infrastructure in rural parts of the country, such as electric transmission and broadband projects.
A shutdown could also delay progress on the clean energy transition: Several EPA rulemaking processes could be deferred.
In fact, even before a shutdown begins, the time and energy of many government agencies is being devoted to preparing for an imminent shutdown in a “process that takes time and attention of managers from the highest levels all the way down.”
Prepare for “reduced” cybersecurity and law enforcement hiring delays.
National security is deemed an essential activity, so nearly three in four (72%) Department of Homeland Security employees—more than 185,000 people—would be required to continue working through a government shutdown without a paycheck.
However, the DHS warns the nation’s cybersecurity could be “reduced” due to a government shutdown—and at a time of increasing global uncertainty and turbulence. The DHS notes that during a potential shutdown the “Cybersecurity and Infrastructure Security Agency's (CISA) capacity to provide timely and actionable guidance…would be degraded.”
CISA would also suspend both physical and cybersecurity assessments for “target rich, cyber poor sectors like water, K-12, and health care,” which are “prime targets” for ransomware attacks.
There also could be bigger, long-term impacts on recruiting and hiring new federal law enforcement officials. In past shutdowns, recruitment and testing of federal law enforcement officials were cancelled, including the hiring of 400 border patrol agents.
If you depend on federal workers for your small business, your revenue could dip.
Not paying these workers on time could cost the economy billions of dollars and leave American families in the lurch.
The situation is especially serious for federal government contractors who do not get backpay once a shutdown ends. Not getting a paycheck has a ripple effect beyond each families’ own finances and can mean local businesses take a hit, especially in communities with a heavy military or federal government presence.
We’re here to help you prepare for a government shutdown. Below, the Chamber has gathered some resources to help businesses of all sizes get ready for a government shutdown.
More insights
Additional Resources:
- The U.S. Chamber’s “Small Business Shutdown Survival Guide” also includes links to resources for federal contractors and subcontractors.
- The U.S. Chamber’s Memo to Members on a Potential Extended Government Shutdown provides background information and an historical overview of past government shutdowns.
- The U.S. Chamber is tracking the Latest Developments in Negotiations to Avert a Shutdown.
About the authors
Thaddeus Swanek
Thaddeus is a senior writer and editor with the U.S. Chamber of Commerce's strategic communications team.
