Small-Business Owners Shaken by Government Shutdown
The trickle-down effect to those relying on SBA loans to tourism operators.
October 18, 2013 - 11:30 pm
WASHINGTON – The 16-day government shutdown’s impact on small business has been “substantial,” a group of small-business owners told the Senate a day before Congress reached an 11th-hour deal on Wednesday to reopen the government and raise the debt ceiling.
Sen. Mary Landrieu (D-La.), chair of the Senate Small Business and Entrepreneurship Committee, convened a panel of small-business owners Tuesday to discuss the impact of the government shutdown on their companies.
The message from every entrepreneur in attendance was the same: the government shutdown had paralyzed their businesses.
“We’re now on Day 15 of a government shutdown, and unfortunately, we’re only two days away of the possibility of the United States signaling to the world that we will not pay our bills,” Landrieu said. She added that the stalemate in Congress, caused by “a small minority from one party” who has decided to “hold the global economy hostage,” was stopping a lot of economic activity in the nation.
A group of small employers representing various sectors, including technology, manufacturing, and tourism, explained to the committee how their companies have been affected by the shutdown.
Chris Leh, president of TL Technologies, told the committee his company was in the process of securing a Small Business Administration (SBA) loan, but missed the window when the government shut down. He said his company, which manufactures small metal parts, had to cancel plans to buy new equipment and had to rescind offers of employment.
“We cannot proceed with the purchasing of our equipment, we had to stop about $600,000 dollars worth of equipment from moving, we idled riggers, electricians and employees,” he said. “We are completely and absolutely in a stall mode at this point.”
Keith Griffall, whose firm operates group travel tours across the western United States, noted the tourism industry has had a difficult decade because of the several natural disasters and the economic recession, and only until recently had businesses started to turn the corner.
“People had confidence. They began to spend their money on travel again,” he said. “And now we have the government shutdown of 2013, which is just one more devastating blow to the small businesses, not just in the western United States, but certainly throughout America.”
It is not just the tour-operating companies, Griffall said, but other businesses have all been hit hard by the closure of the nation’s 59 national parks.
“There are thousands of small businesses that are related to the tourism industry. It is an industry, which is populated mostly by small and very small businesses. And as a tour operator, we use these businesses on every program we operate, everything from hotels, attractions, motels, gift shops, and restaurants,” he said.
The National Tour Association (NTA) has estimated the shutdown cost tourism firms around $152 million per day. According to an NTA survey, 82 percent of respondents said their businesses have been affected by the government shutdown.
“These effects are dramatic, immediate, and unrecoverable, but more importantly, this type of man-made crisis creates immediate effects for small business and all their employees, and it creates long-term effects that can further depress the travel market going into the future,” Griffall said.