TAMPA, Fla. — As the government shutdown continues, an immediate concern for many Americans are the furloughed federal workers who are not receiving their full paychecks or, in some cases, any pay at all. 

However, there’s another group facing serious challenges: Small businesses that depend on federal support programs. 

While the shutdown directly impacts government employees, its ripple effects are being felt across various sectors, particularly among small businesses that rely on government funding.

What You Need To Know

 The last government shutdown happened in 2018 and lasted 35 days

in 2018-19, the GDP only saw minimal impacts from the extended shutdown 

 Uncertainties remain for small business that rely on funding from the federal government for various programs

Congress is expected to take another vote to end the shutdown today

These businesses, some of which do not have an emergency fund to sustain them during periods of disruption, are at risk of facing tough times ahead.

Steve Ribble with Guardian Accounting Group says small businesses without adequate financial reserves could be forced to make cutbacks.

“For businesses that can’t weather the current storm, cutting back could be the only option,” Ribble said.

This situation may result in increased unemployment, which could then strain state unemployment funds. If layoffs become a reality, states will have to pay out more in benefits, further stretching budgets and creating additional financial pressure.

Despite the immediate concerns, Ribble doesn’t believe the shutdown will drastically impact the overall Gross Domestic Product (GDP) or cause a recession.

However, he cautions that the shutdown will only add to the financial pressures that were already affecting the economy prior to the government closure. “We were already seeing strains before the shutdown,” Ribble notes, referring to existing economic vulnerabilities.

Beyond the shutdown’s effects, many Americans are already grappling with significant personal debt.

Currently, Americans carry over $1.6 trillion in auto loan debt, with delinquencies reaching a 14-year high. Additionally, credit card delinquencies are at record levels, and even subprime mortgage holders are seeing an increase in late payments.