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Pushing 'Government Shutdown Loans' to Gridlocked Businesses

Since the partial shutdown of the federal government began two weeks ago, small business lending has been on shaky ground. The shutdown has likely stalled more than $100 million a day in loans backed by the Small Business Administration. There’s also evidence that banks pulled back on other types of small business loans. Lenders say they’re doing their best to help small business owners caught in the impasse.

“We’ve been telling business owners, ‘Don’t let this stop you from planning to grow,’” says Don Mercer, who heads SBA lending at San Francisco-based Bank of the West. For the bank, that means continuing to process applications, which have been accumulating in the SBA’s electronic queues. It’s also meant helping to overcome a specific sort of shutdown-related wrinkle that’s placed some borrowers at risk of losing deposits on commercial real estate acquisitions.