Photo by Adeolu Eletu on Unsplash

The loss in revenue, delays in the release of government–guaranteed loans, delays in approval by government regulatory agencies and other consequences of the federal government shutdown have hit small businesses hard.

While the media focused on the struggles of over 800,000 federal employees during the 35-day shutdown, thousands of small businesses and their employees also suffered as well.

The shutdown’s impact on business may not be as apparent to most people, but it can have a serious impact on economic growth in a few months. In fact, the White House has issued a warning that there could be zero U.S. growth in the first quarter of 2019.

Recession fears

According to a recent CNBC/SurveyMonkey Small Business Survey, over a third of small-business owners experienced a slowdown in sales during the shutdown period. The shutdown could have been the reason why 53% of small businesses said that a recession is likely to happen in the next year, according to CNBC/SurveyMonkey

A big business like Apple can easily recover from a two-month sales slowdown but small businesses may find it difficult to remain viable or retain staff.

Consumer outlook

Even people who do not have financial issues related to the shutdown feel a sense of uncertainty that makes them more careful about investments and big purchases. How many shutdowns can a small business endure and still survive? Uncertainty and disruption are bad for small businesses, which are considered the lifeblood of the economy. Hopefully, elected officials will stop using shutdowns as a way to negotiate public policy.

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