This bill provides emergency funding to ensure the continuation of key Small Business Administration loan programs for 30 days during a government shutdown in fiscal year 2026.
Herbert Conaway
Representative
NJ-3
The Funding Small Businesses During Shutdown Act ensures that critical Small Business Administration (SBA) loan servicing programs can continue operating for 30 days during a government shutdown in fiscal year 2026. This legislation allocates specific funds to cover the salaries and operating costs necessary to maintain key SBA loan functions. The goal is to prevent disruptions to small business lending support during a lapse in appropriations.
New Bill Secures Over $5.4 Billion to Keep Small Business Loans Running During a 2026 Government Shutdown
The aptly named “Funding Small Businesses During Shutdown Act” is a piece of legislative insurance designed to prevent a potential economic headache for small business owners. What this bill does, in plain English, is set aside specific funding so that the Small Business Administration (SBA) can keep servicing critical loan programs even if Congress can’t agree on a budget and the government shuts down in fiscal year 2026.
The Shutdown Safety Net
Think of this as an emergency cash reserve for the SBA’s administrative costs. If a shutdown hits in FY 2026, the bill immediately unlocks over $5.4 billion from the Treasury to cover salaries and operating costs for up to 30 days. This isn’t money for new loans, but for servicing the loans that are already out there, ensuring that the existing financial support system for small businesses doesn't grind to a halt when the rest of the government does.
Specifically, the bill targets three major loan programs. It allocates a massive $2.916 billion for servicing Section 7(m) loans (the smaller loans, typically under $500,000), $1.25 billion for Section 7(a) loans (the general business loans that are the backbone of the SBA), and another $1.25 billion for loans under Title V of the Small Business Investment Act of 1958. It also sets aside an additional $13.775 million just for the administrative costs associated with the Section 7(m) program.
What This Means for Business Owners
If you’re a small business owner—maybe running a local restaurant or a construction firm—who already has an SBA loan, this bill is designed to keep your financial life stable during a government funding lapse. Without this measure, a shutdown means SBA staff are furloughed, and critical services like processing payments, handling inquiries, or working through loan modifications stop dead. That pause can create massive uncertainty and backlogs for businesses relying on these financial lifelines.
For example, if a small manufacturer is working to close on a crucial 7(a) loan modification, this bill ensures the SBA employees handling that paperwork can still show up to work and keep the process moving during a 30-day shutdown. It prevents a situation where a business’s cash flow or expansion plans are suddenly put on hold because of political gridlock in Washington. This is a practical measure that keeps the machinery of small business finance turning, ensuring that the people who need support aren't penalized by a lack of appropriations.