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Possible Government Shutdown: Key Considerations for SBA Lenders

September 24, 2025

The National Association of Government Guaranteed Lenders (NAGGL) recently issued a timely update regarding the potential for a federal government shutdown as the September 30 fiscal year deadline approaches.

As a partner to banks and credit unions that rely on the SBA 7(a) program, we want to highlight a few key takeaways and share our perspective on what this means for lenders:

Why This Matters
  • Potential SBA Disruptions: In the event of a shutdown, the SBA cannot approve any new 7(a) loans or increases to previously approved loans, and new secondary market sales cannot occur.
  • Secondary Market Impact: While some secondary market transactions may continue if all documentation is received by the SBA fiscal and transfer agent (FTA) before a stated deadline, SBA 7(a) Pooling would be suspended until government funding resumes.
  • Internal Approvals Can Continue: Lenders may continue internal approval processes so they are ready to move quickly once the government reopens and SBA loan approvals resume.
  • Servicing Actions requiring FTA/SBA approval may stall if the government shuts down, as well. Both lenders and borrowers need to be aware of this as this could impact their business operations.
Our Perspective

At Lenders Cooperative, we’ve seen these fiscal-year-end uncertainties before. While there’s no guaranteed outcome, we encourage our clients and partners to:

  • Plan Ahead: Ensure loan files are complete and ready for SBA submission to minimize delays once the government reopens.
  • Monitor Communications: Keep a close eye on official NAGGL updates and SBA announcements, as guidance for secondary market activity can change rapidly.
  • Maintain Client Confidence: Communicate proactively with borrowers about potential delays in approvals and set expectations early.
  • If lenders have loans that are already internally approved and are complete enough to submit to the SBA for approval before 9/30, it is highly recommended. The loans could still close, then, if the government shuts down, assuming there are no post-approval changes.

NAGGL is actively engaging with Congress to protect the SBA 7(a) Loan Program’s stability during any potential Continuing Resolution (CR) or shutdown. Their full message provides additional detail and context for lenders.

LINK: NAGGL Member Message – Possible Government Shutdown – NAGGL