When the federal government shuts down, many business buyers panic—they worry their SBA 7(a) loan will come to a halt and their deal will die. Fortunately, that’s not how the process actually works.

The SBA 7(a) loan process begins and is primarily driven by the bank, not the federal government. Once a borrower applies, the bank handles the underwriting process, which typically takes about 60 days. During that time, the bank reviews the borrower’s financials, business plan, purchase agreement, and other due diligence items.

Only after the bank completes underwriting does it request the SBA authorization number, known as the PLP number, from the SBA. That step—SBA approval—occurs at the end of the underwriting period, not at the beginning.

As a result, a government shutdown does not immediately impact the processing of new SBA 7(a) applications. The underwriting work continues uninterrupted at the bank level. Since most shutdowns are short-lived, they are usually resolved well before the end of the bank’s underwriting period, allowing the SBA to issue the PLP number once it reopens.

Bottom line: if you submit an SBA loan application during a government shutdown, it’s still moving forward. The bank continues processing your loan, and in nearly all cases, the government reopens in time for SBA approval to proceed on schedule.

(c) 2025 Prencipe International / M&A Advisory Specialists — For educational purposes only; not legal or tax advice.