On May 19, 2023, a comprehensive report was published, sounding the alarm on the potentially catastrophic impact of federal budget cuts on small businesses across the United States.
Titled “Impacts of Budget Cuts and Brinkmanship on Small Businesses,” this in-depth analysis delves into the numerous challenges that small businesses may encounter in the event of a national debt default.
The report meticulously examines the potential harm caused by significant budget reductions and scrutinises the consequences of the Default on America Act, also known as the Limit, Save, Grow Act, on vital services, essential resources, and critical incentives for both current and prospective entrepreneurs and small business owners.
At the forefront of the report’s findings is the striking realisation that spending cuts would deal a severe blow to small businesses, especially considering the ongoing efforts to recover from the devastating impact of the COVID-19 pandemic.
It unequivocally emphasises the alarming concern that proposed budget cuts by the Republican party could place small business owners in an incredibly challenging position, potentially forcing them to make the heart-wrenching decision to close their doors permanently.
The report highlights key excerpts that shed light on specific issues that would arise from these budget cuts. Of particular concern is the impact of cuts to the Small Business Administration, as this reduction in support would disproportionately affect veteran owners who have relied on the agency’s assistance.
The potential freezing of funding for the Entrepreneurial Development program at the fiscal year 2022 levels is also a matter of grave concern, as it would result in a staggering $29.9 million reduction compared to the fiscal year 2023 levels.
This drastic reduction in funding would ultimately restrict support for an estimated 125,000 small businesses and aspiring entrepreneurs, further exacerbating their already challenging circumstances.
Furthermore, the report emphasises that minority-owned and underserved small businesses, which often operate with slim profit margins, would bear the brunt of these adverse consequences. These businesses, already facing significant barriers to success, would face even greater challenges and potential closures as a result of the proposed budget cuts.
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