Government shutdown hurt small business loans
Nov. 7, 2013 – The partial government shutdown this fall had harsh effects on the Small Business Administration’s lending programs, but according to a report from Experian and Moody’s Analytics, the agency should be able to make up for it by the end of 2013.
According to an article in Bloomberg Businessweek, the data showed the almost-three-week-long shutdown caused a 35 percent decrease in loans compared to the previous October’s numbers. The government employees responsible for approving loans were furloughed for much of that time.
The report also found that small businesses overall are avoiding delinquency: “An index tracking small business credit quality is at its highest level since Experian and Moody’s started compiling the data at the beginning of 2010. To that end, fewer small business owners are delinquent on loans than at any time during the recovery from the Great Recession.”
However, the report warned that uncertainty could cause further problems for small businesses, given that Congress’ Oct. 17 deal only funds the government through January.
Bloomberg Businessweek article