Government shutdown affects small business loans, home loans

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by Philip Townsend, 13News Now

WVEC.com

Posted on October 1, 2013 at 4:49 PM

Updated Tuesday, Oct 1 at 6:00 PM

NORFOLK -- Small business owners could also be at the mercy of the federal government after a government shutdown puts a hold on small business loans for start up companies.
 
The Small Business Administration will not be able to process new loan requests during the shutdown.
 
The SBA guarantees tens of billions of dollars in loans to businesses every year. The department's existing loan guarantees will remain in effect.
 
That leaves many people without the capital to start or expand their business.
 
13News Now talked with Zack Miller with Hatch in downtown Norfolk. His own start-up company invests and mentors other new businesses in the region.
 
"Just because you can't get a loan today, doesn't mean there isn't a way to get across the river tomorrow," said Miller. "The best entrepreneurs love to solve complex problems."
 
Miller urges people to consider other alternatives like presales on products or investments from family and friends.

According to local mortgage experts, home loans backed by the government will continue for the time being.
 
Officials with the U.S. Department of Housing and Urban Development mistakenly said Friday applications by the Federal Housing Administration would stop.
 
However, a limited number of FHA staff members will be available to approve new loans.
 
"The first 48 hours are going to be the toughest," said Steve Rockefeller with the Virginia Mortgage Lenders Association. "After that, I'd say it's anybody's guess. By Monday, if the government is still shutdown, that's when it's going to have an impact."
 
An area that is still unclear is how long it will take to process home loans considering FHA furloughed 96 percent of its staff members.

 

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