The Government Must Stay Open for The Sake of Small Businesses

On behalf of the California Association for Micro Enterprise Opportunity (CAMEO) and its member organizations, we are glad to hear the news that Congress and the President have reached a deal to reopen the federal government through February 15. 

Throughout the 35 days of the government shutdown, the adverse consequences for the 3.9 million small businesses across the state only grew. Cash flow, access to capital, and the inability to collect payments are some of the many challenges California businesses faced during this shutdown. Small businesses depend on loan assistance and resources through the Small Business Administration (SBA), which were unavailable during the shutdown. With the SBA’s loan processing centers unable to operate in states such as California, small businesses are estimated to have lost out on $117 million in capital every day that the government was closed. Furthermore, the delay in issuance of grants that assist entrepreneurs resulted in a loss of critical training programs that support thousands of new jobs across California.

In FY18, California companies received $58.2 billion in contracts from the federal government. Of that contract value, 14.4% came from departments and agencies recently impacted by the shutdown, an amount of $8.4 billion. This impacts hundreds of thousands of federal employees and contractors in California who did not receive pay during this time. According to a report released by House Small Business Committee Chair Nydia Velazquez, small firms nationally forgo 6,875 contract actions a day, worth $301 million, during a shutdown. Federal contractors could lose or be delayed in receiving $200 million per day. Given California’s sizeable contracting base, this is a significant impact on our state’s businesses and to the larger U.S. economy.

With each passing day of the shutdown, the situation only got worse for the 3.9 million small businesses and 245,000 federal workers in California. We thank our California delegation members along with the rest of the United States Congress and the President for reopening the federal government and urge them to expeditiously move legislation to make sure it remains open. It is vital to the small businesses that support California’s economy.