By: Stefano Tromba Jan 23, 2019

How a Government Shutdown Affects Small Business

There’s absolutely nothing to like about a government shutdown but in recent years (and in the last few administrations), we’ve unfortunately seen them occur. But aside from the public loss of a wide range of services, and federal jobs, many don’t realize how it impacts small business. So, here’s breakdown of how small business is affected by the shutdown and ways to avoid the sting.

Start Ups

Many new businesses take advantage of government funded programs designed to encourage entrepreneurship. Unfortunately, when the federal government itself fails to pay its own bills, small businesses suffer as well. That means federally funded loans, intended to help companies are not available.

Fortunately, there are companies who offer funding for small businesses. Depending on the amount requested, they can even receive same-day approval. We at Fingercheck for example, offer such a service – with no underwriting required for amounts of up to $5K – providing certain requirements. This can be a valuable resource for many companies in need of a financial boost.

Hiring Freeze

The heavily visited federal E-verify website, that allows businesses to determine the eligibility of employees to work in the US, is also a casualty of the government shutdown. Companies seeking to verify employees’ legal status before they’re hired suffer since they must verify legal status prior to hiring. Also, many recruiters put off hiring plans while those looking to switch jobs typically wait to do so until the shutdown ends.

Federal Employee Businesses

Furloughed federal employees are always first and hardest hit with the gut punch of a government shutdown. With it, restaurants and other eateries located near federal building, experience a major drop in lunchtime covers that they desperately rely on. In fact, all small businesses located near federal buildings, including national parks, tourist shops and monuments feel the affect.

IRS Scale Down

No, the IRS doesn’t completely shut down along with the government, but it is limited in certain ways. The agency won’t have the ability to answer taxpayer questions on tax liabilities. This includes, you guessed it, small businesses. It also won’t issue refunds, amend returns or process 1040X. But on a positive, they don’t conduct audits dring this period.

A Change Will Do You Good

Sure, there’s no upside to a shutdown – but it does force small business owners to get creative and look to ways to do business differently. One would be to entertain a more modern, cost-effective way to run a business.  More and smaller companies are turning to automation to save money and time.  Automating things that were once considered highly time consuming like, running payroll and HR management can now be performed automatically and way more efficiently. Hopefully the current shutdown doesn’t last much longer but it should make business owners re-evaluate the way they do business – even when the government isn’t.



Category: Fingercheck | HR

Stefano is a seasoned marketing professional who holds a BA degree in Journalism and Media Studies from Queens College. His work and experience spans many industries that include sports, talent acquisition, food/beverage and publishing, just to name a few.

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