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The Small Business Administration will shut down its lending programs Tuesday if Congress doesn't enact a new funding bill by then.
This is going to be a busy day for processing Small Business Administration loans -- that's because lenders are rushing to get new loans to the agency for final approval before Tuesday, when the federal government will likely shut down.
"I hope the SBA is ready," said Tony Wilkinson, president of the National Association of Government Guaranteed Lenders.
Most SBA lending is done by preferred lenders, who are authorized to approve government-guaranteed loans on their own. But those lenders still have to submit loans to the SBA electronically and get a loan number before the loans can be closed. That's why many SBA lenders spent the weekend getting loans ready for submission on Monday, Wilkinson said.
"We may not have a program tomorrow," he said.
The SBA's lending programs will shut down Tuesday, along with many other government functions, if Congress doesn't approve a new funding bill. The current bill funding the government expires at midnight, the end of the government's fiscal year.
Loan applications that aren't approved Monday will start piling up in a queue for SBA to process when agency officials return to work.
The rush to get loans processed Monday could further boost what's already been a strong fiscal year for SBA lending.
As of Friday, the SBA had approved $17.2 billion in 7(a) loans this year, compared with $15 billion a year ago. That volume also is more than twice as much money as was approved in 2009, when the economy was walloped by the financial crisis.
Demand for SBA loans could slacken in the next couple of weeks, however, because small businesses may wait to make credit decisions because of the uncertainty created by the government shutdown and the mid-October deadline for raising the government's debt limit.
"You don't know how long this is going to last," Wilkinson said.
