Politicians in Washington continue to wrangle over the federal budget. The latest meeting between President Obama, Vice President Biden and leaders of the Senate and the House failed to produce any solution.

Businesses that sell into the federal government are wondering what impact this will have for them. Sadly, a government shutdown would have a disproportionate effect on small businesses because, unlike their larger counterparts, they do not have the financial resources, or the diversity of income streams (outside of the public sector) to weather this.

We are concerned for these businesses, not only because SMBs represent the largest chunk of our customers, but also because they are a primary driver of economic growth. We are beginning to see some good signs of economic improvement, but we’re not out of the woods yet. This couldn’t come at a worse time.

Stacy Cowley at CNNMoney has a good article on how some small and medium-sized businesses are planning to cope with this situation. For example:

Jimenez is carefully eying his credit lines, available cash and accounts receivable to figure out how MicroTech will manage if the money stops coming in. It’s not just the lost revenue from stalled work he’s worried about. If the government’s financial officers aren’t around to cut checks, MicroTech won’t get paid for invoices it submitted 30 or 60 days ago. 

That’s not a pretty picture. We hope that, for the sake of the nation and thousands of workers and businesses out there, our politicians put aside party differences and work something out, so that SMBs can get back to work and create value – as opposed to having to deal with yet another human-created emergency.

Rodrigo

  1. Darren

    Hope so too! You’re very right, the impact would be most detrimental to those who can least afford it, especially as these small businesses are so crtiical to the economy’s well-being.Perhaps the government should have kept some of that TARP funding in reserve for this kind of scenario instead. Hopefully they have something tucked away somewhere just in case.

  2. Darren

    Hope so too! You’re very right, the impact would be most detrimental to those who can least afford it, especially as these small businesses are so crtiical to the economy’s well-being.Perhaps the government should have kept some of that TARP funding in reserve for this kind of scenario instead. Hopefully they have something tucked away somewhere just in case.