As the government remains closed for another week, the effects of the shutdown are beginning to harm more businesses and consumers. Specifically, the shutdown has effectively halted small businesses from continuing operations. Indeed, with the inability to seek funding, hire employees, pursue growth and expansion, and seek the requisite certification to even continue operations, small businesses are facing the consequences of an ineffective government.
How is the Government Shutdown Affecting Small Businesses?
First, the government shutdown has cut financial resources for small businesses. For example, banks and other financial institutions are unable to issue loans while the Small Business Administration remains closed and cannot process final paperwork. With the Internal Revenue Service closed, lenders cannot check tax information or provide funding for applicants. Additionally, businesses are unable to hire new employees without access to E-Verify, a government-backed website that allows companies to ensure new employees can legally work in the United States. Businesses that operate in regulated industries are also at a standstill as they wait for government agencies to issue their certifications, so they can continue with their work. For example, entrepreneurs looking to establish a business or expand in the food industry must seek approval from the Department of Agriculture; and with it being closed, some businesses are unable to proceed. Aside from the ability to generate businesses, companies are also losing money as they continue to pay rent and operational costs without revenue. The current uncertainty is perhaps even more frustrating. Not only are small businesses unable to conduct operations and fulfill orders, they are also unable to give their customers an answer for when business will return to normal. There is an increased concern that even when the government does return, all the time it has been closed will translate to an extensive backlog, that will continue to slow down business operations.
How Can Small Business Protect Itself Against the Government Shutdown?
In order to ensure that the shutdown does not cause more harm, small businesses should become aware of their legal rights and responsibilities, which are implicated as a result of their inability to sustain business operations. For example, businesses are unable to fully perform their contracts with customers and other businesses. This could translate to legal disputes involving claims for breach of contract. The inability to secure loans could also lead to financial disputes involving both personal and real property. An inability to continue payments for business property could result in foreclosure or bankruptcy. However, understanding the legal standards regarding foreclosures could help save your business. Accordingly, businesses benefit from speaking to an attorney with experience who can explain the implications of the government shutdown for your small business. Indeed, our offices can also serve as outside general counsel to continue providing legal advice tailored for your requirements.
At the Law Offices of Salar Atrizadeh, we guide our clients in legal matters regarding all aspects of operating their business successfully by using extensive knowledge and skills to create innovative solutions. Please contact us today to set up a confidential consultation.