Everything stops. The SBA office your bank has been working with goes dark. The person who was reviewing your application? Furloughed. The system that was processing your file? Frozen until further notice.

It feels like someone just yanked the parking brake while you were going 60 down the highway.

Dave Oetken, Louisville Small Business Development Center

The Cold Reality of a Shutdown

When Washington hits pause, the Small Business Administration grinds to a halt right along with it. It’s not personal — it’s just how federal funding works. Unless your loan falls under an “essential” program (like disaster recovery), it’s stuck in limbo until Congress figures things out.

That means no new loans are approved, and no amount of refreshing your email will make that “SBA decision” notification appear.

Even worse, once the government does reopen, the backlog will be massive. Lenders and SBA reviewers will be digging through a mountain of stalled applications.

So yeah — it’s frustrating. But here’s the good news: this doesn’t have to derail your business. You just need to pivot.

Don’t Panic! Talk to Your Lender

Your first call shouldn’t be to your congressperson — it should be to your lender. Whether it’s a bank, credit union, or SBA-approved lender, they understand the situation. They’re dealing with this too, and you might be surprised by how much flexibility they have.

Some banks offer short-term “bridge” loans — essentially a temporary source of funding you can roll into your SBA loan later. Others might extend or expand an existing line of credit just to help you weather the delay.

Even if they can’t move funds immediately, they can help you prepare. Ask them what documentation or updates you can handle now so your file’s first in line when the SBA reopens. That prep work can shave weeks off your waiting time later.

Exploring Other Ways to Keep the Lights On

Waiting out a shutdown is one thing. Keeping your business running during it is another. If your expansion or daily operations depend on that loan, it’s time to get creative with financing.

A line of credit might be your best friend right now. It’s flexible, relatively quick to set up, and gives you access to cash when you need it — not before. Sure, the interest rates can be higher than what you’d get from the SBA, but it’s often the difference between standing still and moving forward.

If your expansion involves equipment, look into asset-based financing. It’s surprisingly common — lenders use the equipment itself as collateral. That way, you can buy what you need now and refinance later under the SBA’s better terms once things normalize.

And then there’s the fast-but-expensive world of online lenders. Companies like BlueVine, OnDeck, and Fundbox can approve loans in a matter of days. They’re not cheap, and the repayment terms can be aggressive, but they do one thing really well: they get you money now.

For some businesses, especially those with steady revenue but tight cash flow, invoice financing can help. You sell your unpaid invoices at a small discount and get the cash right away. It’s not glamorous, but it can buy you breathing room.

One word of warning, though: if someone offers you a “merchant cash advance,” proceed with caution. Those can feel like quick solutions — a lump of cash in exchange for a portion of your future sales — but the repayment costs are brutal. It’s a short-term fix that can easily become a long-term headache.

Don’t Forget the Local Options

Here’s something most people overlook: the federal government isn’t the only game in town.

Your Louisville Small Business Development Center (SBDC) is still open — we don’t shut down when D.C. does. We can help you connect with regional funding programs, state-backed grants, or community development funds that are still running.

Many cities and states have their own small business loan funds, especially for rural businesses, startups, and minority-owned companies. These programs don’t always have the marketing muscle of the SBA, but they often move faster and have more flexible criteria.

If you’re in Kentucky, for example, there are local CDFIs and community banks that specialize in supporting small business growth. These aren’t “Plan B” options — they’re legitimate alternatives that could get you the funding you need without waiting on Capitol Hill.

Use This Time to Get Your House in Order

If the SBA can’t move your loan right now, that doesn’t mean you’re powerless. Use this downtime to make your application bulletproof.

Start by cleaning up your financials. Make sure your profit and loss statements, balance sheet, and cash flow projections actually tell the story you want lenders to see.

Next, check your credit — both personal and business. If anything is dragging down your score, fix it now. Pay down small debts, resolve collections, and dispute errors. Every point helps.

If you’re using collateral for the loan, double-check that you’ve got all the documentation and valuations lined up. Lenders love clarity.

And don’t underestimate the power of your story. The “why” behind your loan matters just as much as the numbers. Why this expansion? Why now? What will it do for your customers, your team, your community? The clearer your story, the stronger your application.

When the SBA reopens, you’ll want that application to be so tight and so ready that your lender can send it through immediately — no waiting, no fumbling for documents, no second drafts.

Thinking Outside the Loan

If you’re open to it, this might also be the moment to explore non-loan funding.

Equity financing — bringing on a partner or investor — isn’t for everyone, but it can be a smart move if the right person comes along. Maybe it’s an industry contact, a local investor who believes in your idea, or even a crowdfunding platform that lets your community invest directly in your growth.

The trade-off, of course, is ownership. You give up a piece of your business. But you also gain a partner, a sounding board, and potentially someone who brings skills or connections you don’t have yet.

Grants are another path, though they take patience and persistence. They’re free money, but they come with strings — usually in the form of eligibility requirements, long applications, and competition. Still, it’s worth looking into state-level or corporate grants. Even small awards can help keep your plans moving.  I put together a list of grants I could find. You can check it out HERE.

Tighten the Reins

If your funding is stalled, the next few months are about cash discipline. Think like a survivalist: conserve what you have, stretch every dollar, and avoid unnecessary risk.

Put major purchases on hold if you can. Negotiate with suppliers — many would rather extend payment terms than lose a good customer. Keep your payroll stable, even if it means slowing expansion.

Remember, business isn’t always about growth. Sometimes it’s about endurance. Staying alive through the storm is what gives you the chance to thrive afterward.

What Happens When the Lights Come Back On

Eventually, the government will reopen. And when that happens, the SBA will get back to work — slowly at first, then all at once.

The first wave will be chaos: thousands of business owners rushing to pick up where they left off. But if you’ve done your prep work now, you’ll be ahead of that wave. Your lender will already have your documentation, your credit will look sharper, and your story will be stronger.

That’s when being ready pays off. The SBA prioritizes complete, organized, ready-to-go applications. The more work you do now, the faster your loan will move once the system wakes up again.

The Real Lesson in All This

Here’s the hard truth: business owners live in a world full of uncertainty — whether it’s a shutdown, a supply chain issue, a pandemic, or something else entirely. You can’t control Washington. You can’t control the economy. But you can control how prepared you are.

Use this time to strengthen your business — the systems, the story, the strategy. Build relationships with lenders and local partners. Stay visible in your community. Keep your finances clean and your mindset steady.

When the SBA reopens, most people will scramble. You’ll already be moving.

And maybe that’s the bigger takeaway here: resilience isn’t about avoiding obstacles — it’s about adapting faster than the people who get stuck behind them.

So yes, the government might be shut down. But your business? It’s still open.

Are you looking for financing resources? The Small Business Development Center team can help! If you’d like to chat via Zoom to start your funding journey, you can find some time to Schedule a Zoom Call with me or one of our other business coaches! Or, reach out to me at [email protected].  I’d love to hear from you!