What the Government Shutdown Means for SBA Loans and Commercial Real Estate Buyers in Southern California
If you are in the process of buying commercial real estate in Southern California, you have likely heard that the federal government entered a temporary shutdown on October 1, 2025. While these shutdowns are usually short-lived, they can cause meaningful slowdowns in deal flow—especially for those relying on SBA 7(a) or SBA 504 loans.
For now, the SBA has paused loan processing until funding resumes. Approved loans should remain intact, but any application still under review is temporarily frozen. While this delay can be inconvenient, it does not mean deals must stall entirely. With the right strategy and communication, many buyers can keep transactions moving forward.
How Different Property Types Are Affected
Office and medical office buyers may feel the most impact since SBA financing plays a major role in owner-user purchases. Industrial property buyers tend to have more options through conventional or private financing, meaning fewer delays. Retail and mixed-use properties sit in the middle—impact varies depending on lender and loan structure.
Workarounds for SBA Delays
There are practical ways to keep deals alive:
Bridge Financing: Some Southern California lenders offer short-term bridge loans that can close now and convert to SBA once the shutdown ends.
Private and Regional Lenders: Local banks and credit unions sometimes provide similar programs to SBA, allowing buyers to stay on schedule.
Document Readiness: Keep all financials and disclosures current so your file can move immediately once funding resumes.
Open Communication: Coordinate closely with your broker and escrow team to request extensions early and maintain seller confidence.
Our Opinion:
Historically, government shutdowns are temporary and funding typically resumes quickly. The key is to stay adaptable. Buyers should view this pause as a timing issue rather than a financial roadblock. Lenders are prepared to pivot once operations resume, and in the meantime, relationships with experienced brokers and local lending partners will be the biggest advantage.
How The Ocean Company Can Help
At The Ocean Company, we guide clients through every phase of the commercial real estate process—especially when market or government conditions shift unexpectedly. Our team works with a network of trusted SBA, regional, and private lenders across San Diego and Southern California to help clients identify flexible solutions. Whether you’re acquiring a medical office in La Jolla, an industrial property in Carlsbad, or an owner-user office in Mission Valley, we can help you strategize the best path forward.
The government may be on pause, but your business growth does not have to be. Contact The Ocean Company to explore financing options, secure bridge lending, and prepare for SBA loan funding to resume.