From MSP to Main Street, Minnesota businesses feeling government shutdown

Minnesota’s small businesses and those raking in billions a year face a common problem: The government shutdown is snarling operations and starting to cost them money.

Hit hardest are the workers missing paychecks. The federal shutdown, which began Oct. 1, has left workers charged with administering small business loans, supervising air traffic and regulating life science companies furloughed or working without pay.

Medtronic received Medicare approval for novel technology treating hypertension on Tuesday, weeks later than expected due to federal worker furloughs. Delta Air Lines president Glen Hauenstein told investors the congressional impasse is snarling air traffic control towers and resulting in lost revenue for the airline, though still less than the $1 million daily losses seen in the last shutdown.

A spokesman said the flagship carrier at Minneapolis-St. Paul International Airport “implores Congress to immediately pass a clean continuing resolution to reopen the government,” which is a reference to a Republican-backed measure also supported by associations representing federal workers, small business owners and others.

Democrats in Congress have refused to vote to end the shutdown unless Republicans agree to extend federal health insurance subsidies. As it stretches into its second month with no immediate end in sight, real world ramifications are starting to stack up, from the benefits and assistance distributed by the federal government to the dense interplay between government and commerce.

For the biggest businesses, smooth operations often depend on the participation of government workers. It’s thanks to federal employees such as air traffic controllers “that Delta is able to carry more than 500,000 daily customers on 5,000 daily flights. A system under stress must be slowed down, reducing efficiency and causing delays for the millions of people who take to the skies every day,” a Delta spokesman said in a statement.

The spokesman said the airline will delay or cancel flights if necessary to ensure safe air traffic control. Passengers may spot Delta employees helping assist the Transportation Security Administration, and the airline has arranged a limited number of meals for transportation sector workers amid the shutdown, he said.

Dave Scott, St. Paul-based Sunrise Banks’ director of commercial banking, said many companies rely on the federal Small Business Administration’s 7(a) and express programs for financing. Bankers can’t execute these loans due to the shutdown.

A note on the administration’s website, which blames Democrats for the shutdown, said 320 small businesses per day cannot access funding that amounts to $170 million amid the shutdown.

“The impact is going to be, ‘We can’t buy this business that we were planning to buy. We can’t start this business we were planning to start,’” Scott said.

Scott said his bank is continuing to take requests and underwrite loans amid the shutdown. The longer the shutdown drags, he said, the greater a problem it becomes for small businesses, which may also use the loans to buy essential equipment.

Government contractors have also been stung.

With the federal shutdown, that contract’s on hold — and so are Anderson’s hopes for a solid year end.

“We were planning on having that [$2.5 million] in this fourth quarter,” Anderson said. “It impacts me because I’ve got lines of credit that I need to pay down. I was planning on using the revenue from that to help pay the bills” and fund a warehouse purchase.

The contract delay is just the latest nugget of worry. The federal government is 90 days late paying Atek $16,000 for circuit breakers the company delivered back in July. The government usually pays in 35 days. With the shutdown, no one is answering Anderson’s emails or calls.

The silence comes at a precarious time. Because of a new agreement Anderson signed in July, Atek is now under contract to deliver — starting next week — $477,000 worth of electrical materials to the U.S. Department of Agriculture.