Black- and minority-owned businesses are suffering from the federal government shutdown, facing economic weakness and hindrances to operations. The closure, which began on Oct. 1, is set to be one of the longest in U.S. history, impacting minority business enterprises with losses estimated at $400-450 million.

A new survey by the NMSDC revealed that MBEs are experiencing contract delays, payment interruptions, reduced demand for goods and services, layoffs, and increased borrowing costs due to the shutdown. The survey received 89 responses from member firms in 26 states, showing that over a third of minority-owned businesses are directly affected.

The shutdown, possibly extending into November, has grave consequences for small businesses with federal contracts. The SBA has ceased guaranteeing loans, affecting 320 small businesses daily, losing out on $170 million in SBA-guaranteed funding. Economist Cunningham notes that minority business owners are cautious about speaking out amidst the shutdown.

The losses faced by MBEs are severe and enduring, with nearly a third experiencing contract and payment delays, along with decreased services. The NMSDC survey highlighted various challenges, from outstanding government contract payments to resorting to cash advance loans for payroll. Businesses are adjusting by seeking state opportunities, private contracts, and new financing avenues.

Many Black and minority businesses rely on federal contracts for revenue, amplifying their vulnerability during the shutdown. NMSDC findings emphasize the need for stronger connections and intra-MBE partnerships to weather the economic storm. Cravins stresses the importance of facilitating collaborations and financing to support minority-owned businesses in these challenging times.

Read more at Yahoo Finance: Black And Minority Businesses Slammed By Government Shutdown, With Projected Losses Up To $450M