The shutdown is impacting businesses in several ways, while highlighting the number of private sector companies that rely on a federal bureaucracy, The Wall Street Journal reported Wednesday (Oct. 8).
“That’s a very scary place to be in as an entrepreneur,” said Brian Butler, CEO of Florida-based marketing firm Vistra Communications, which relies on the government for around three-quarters of its revenue, per the report.
Butler laid off five of his 80 employees last week after the shutdown led to a stop-work order on one of its projects, the report said. He paid each of the workers a week’s salary and is covering their share of health insurance costs for the month.
“If I receive one, two, three more of these, I’m not sure I can do that for that many people,” Butler said of the stop-work orders, per the report.
Elsewhere, government-backed small business lending has stopped, agencies can’t award or make payments on many new contracts, and inspections and regulatory reviews are on hold, the report said.
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The shutdown is happening as businesses in the United States continue to deal with the effects of tariffs. PYMNTS Intelligence found that the turbulence caused by these levies could lead to especially acute pain for small- to medium-sized businesses (SMBs).
SMBs are also dealing with another government-related issue of late: the phasing out of paper checks as of this month.
“The vast majority of government payments already are done via electronic methods,” U.S. Faster Payments Council CEO and executive director Reed Luhtanen told PYMNTS in an interview Monday (Oct. 6).
However, the targeting of the holdouts could provide ripple effects that extend beyond government channels, he said.
With the government shifting the last of its check-based disbursements to digital rails, adjacent sectors are expected to do the same. Luhtanen said that even in situations where opt-outs for paper are permitted, the default will move participants toward faster, digital methods.
Meanwhile, it’s not just small businesses affected by the shutdown. With government action on pause, antitrust cases involving tech giants Amazon and Apple are on hold for now.
