The longest government shutdown in United States history has left small businesses across the country in financial limbo, with vital federal contracts frozen and payments delayed for seven weeks.
Contract Chaos for Small Firms
House lawmakers returned to Washington on Wednesday 12th November 2025 to vote on compromise legislation that would fund the government through January 30th. While the bill is expected to pass the Republican-led chamber, a majority of Democrats are likely to vote against it.
For small business owners relying on government contracts, the shutdown has caused significant disruption. Many have been forced to reduce spending, consider layoffs, and seek alternative work while attempting to contact shuttered government offices.
Jackson Dalton, owner of Black Box Safety, experienced the shutdown's immediate impact firsthand. His company, which manufactures personal protective equipment, was awarded a $1.9 million federal contract for flashlights the day before the shutdown began on October 1st.
"It's had a major impact on our cash flow, on our operations," Dalton explained. The contract would have accounted for 6% of his annual revenue and required an initial investment of $1 million from his El Cajon, California-based company.
Cash Flow Crisis Deepens
Dalton revealed that his suppliers were "freaking out" after anticipating the award for nearly a year. The only communication he received during the shutdown was an emailed stop work order, despite the contract requiring completion within 120 days.
Meanwhile, Eric Veal of Interactive Knowledge in Charlotte, North Carolina faces similar challenges. His eight-person company creates digital interactive experiences, with about 60% of this year's work coming from Smithsonian Institution contracts.
"Federal employees are not able to work at all, and invoices and projects are at a complete halt," Veal stated. Although the Smithsonian receives partial private funding, he noted it was "difficult to complete the work without a full staff."
Veal has cut expenses and warned that layoffs would become necessary if the shutdown continued past November 15th. The situation has prompted him to reconsider his company's reliance on federal contracts.
Broader Business Impact
The shutdown has also overshadowed important policy discussions. About 2,000 small business owners attending a Goldman Sachs 10,000 Small Businesses summit in Washington D.C. from October 29th-30th found their advocacy efforts hampered by the crisis.
Joe Gelardi, president and CEO of Vectrona, described how the shutdown created "a lot of uncertainty" for his Virginia Beach company, which provides technology and training for military personnel.
"Companies are being asked to carry the load, and we do it in most cases because we don't want to let our customer down," Gelardi said. "But it's really unfortunate that the federal government is transferring the burden."
For some businesses, the impact has been severe. Karen Jenkins of KRJ Consulting reported that the shutdown affected her Columbia, South Carolina-based firm as significantly as the COVID-19 pandemic, with contracts cancelled and potential opportunities withdrawn.
As small business owners await the shutdown's end, many are working to maintain operations while hoping to provide much-needed capacity when government operations eventually resume.
