Small businesses deserve clarity and certainty when it comes to spending and federal funding.
FOR IMMEDIATE RELEASE
Tuesday, Jan. 28, 2025
Contact: Molly Day
202-552-2904, mday@NSBAadvocate.org
Funding Freeze Provides Little Details or Security for Small Business
UPDATE, JAN 29, 1:12 PM | President Donald Trump has reportedly rescinded an order freezing an array of federal grants, loans and financial assistance, a dramatic reversal after days of uncertainty and anxiety rocked governments and nonprofit organizations.
The reversal, issued by the White House budget office, stated that the original memo was “rescinded” and directed questions about implementation to agency and department lawyers, according to people familiar with the matter.
The change comes after a federal judge temporarily blocked the directive, and came after the push drew bipartisan criticism from lawmakers who worried it could imperil anti-poverty initiatives, medical research and other critical services.
Agencies with questions are directed to contact OMB, but no other details have been provided.
Follow NSBA as we continue tracking progress of these announcements.
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UPDATE, JAN. 28 PM | Late Tuesday, a federal judge temporarily blocked the administration’s planned funding freeze. The administrative stay was issued in a lawsuit brought yesterday by a handful of nonprofit groups impacted by a potential freeze. Stay tuned.
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UPDATE, JAN. 28 | Earlier today, OMB released a FAQ on the funding freeze that stated, “Funds for small businesses, farmers, Pell grants, Head Start, rental assistance, and other similar programs will not be paused. If agencies are concerned that these programs may implicate the President’s Executive Orders, they should consult OMB to begin to unwind these objectionable policies without a pause in the payments.”
With this announcement, it appears most small-business lending program funds will not be immediately paused, and SBA and any other agencies providing financial disbursements—such as 7(a) loans, SBIR awards, disaster loans—will be required to submit financial and oversight information by Feb. 7.
Follow NSBA as we continue tracking progress of these announcements.
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Washington, D.C. – Yesterday, President Trump’s Office of Management and Budget (OMB) issued a statement directing federal agencies to temporarily pause all agency grant, loan and other financial assistance programs. Where small business stands and how various small-business programs will be impacted remains to be seen. During the freeze, agencies are directed to review programs and determine the best uses for these programs.
Many of the most highly-utilized programs that provide funding for small business reside under the U.S. Small Business Administration (SBA); namely the 7(a) lending—and other smaller lending programs—as well as disaster funding. It is unclear how SBA plans to implement this freeze, and how such a freeze would impact a program that leverages private-sector lending to serve as “lender of last resort” for many small firms.
“While the impact on SBA and its critical small-business loan portfolio is still unclear, I can tell you that we’re hearing from members who are concerned, and unsure how this could impact existing loans or loans already in the pipeline,” stated NSBA President Todd McCracken. “My hope is that SBA embraces pragmatism and provides clarity soon on how this freeze is likely to impact the many programs they run that provide lifeblood financing during all stages of business growth and when they most need it—during a disaster.”
NSBA has been an outspoken supporter of SBA lending programs which leverage private funds to great success and at a relatively low cost to taxpayers—leading to innovation and job creation.
Celebrating more than 85 years in operation, NSBA is a staunchly nonpartisan organization advocating on behalf of America’s entrepreneurs. NSBA's 65,000 members represent every state and every industry in the U.S. Please visit www.nsba.biz or follow us at @NSBAAdvocate.
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