SBA Shutdown Update
The SBA remains shutdown as part of the larger, partial federal government shutdown due to a lapse in appropriations. Florida First Capital, however, continues to accept new projects. During the shutdown, we can still work on files, prepare submissions and get internal approvals so we are as best prepared as we can be once the SBA reopens.
Currently, only SBA employees deemed “essential” may currently report for work, and may only perform work in a limited capacity. There are no loan approval activities nor a queue for loan applications during the shutdown. Servicing actions that require SBA’s approval CANNOT be taken during the shutdown, unless they are deemed essential to protecting the interest of the lender and/or the SBA.
Regarding previously-approved and obligated 504 loans, debenture sales will continue for the foreseeable future. The January sale recently concluded and the February sale is scheduled to occur. Please note that the only actions being reviewed by the SBA 504 Processing Center are the “No Adverse Change” actions and the “Request to Ship File” actions. If a particular loan requires any other approvals or change actions, the closing will not be approved for the upcoming February funding.
Once the government gets back up and running, small business owners and lenders need to be prepared to face the resulting backlog of paperwork, approvals and processing delays in the attempt to obtain, service and liquidate SBA 7(a) and 504 loans.
Speedy resolution of the partial government shutdown and prevention of a state of emergency is critical to prevent confidence levels for Main Street from bottoming out.
A recent report released by the House Small Business Committee highlights these stats:
• A shutdown reduces access to capital for SBA’s 7(a) lending product by $90 million per day. This translates to 192 small businesses per day that cannot access the capital they need to grow and create new jobs.
• A shutdown prevents the disbursement of approximately 117 SBA 504 loans per week, representing a weekly total of over $102 million.
• Previous shutdown data indicates that on a daily basis, a shutdown could cause small firms to forgo approximately 6,875 contract actions worth $301,656,083 million.
• With an estimated 380,000 federal furloughed employees and another 420,000 working without pay all over the country, small firms will lose business and confidence in the economy.
If you have questions or would like more information about SBA 504 loans in Alabama, Florida or South Georgia, contact a Florida First Capital Loan Officer or email us at info@FloridaFirst.com. Phone: 850.681.3601 or toll-free at 800.504.LOAN.