Federal Grants and Loans Temporarily Paused: Key Updates for Small Businesses

The White House Office of Management and Budget (OMB) has announced a temporary pause on federal grants and loans, effective January 28, 2025, at 5:00 PM. This directive impacts programs administered by federal agencies while a review is conducted to align financial assistance with new administrative priorities.

Key Highlights:

• Pause Scope: The pause includes financial assistance for programs such as foreign aid, nongovernmental organizations, diversity, equity, and inclusion (DEI) initiatives, and green energy projects. It does not affect direct assistance to individuals, Medicare, or Social Security.
• Review Period: Agencies are required to analyze their financial assistance programs and submit detailed information by February 10, 2025. This includes pausing new awards, disbursement of funds under open awards, and other activities tied to federal financial assistance.
• Exceptions: Agencies may seek case-by-case exceptions from the OMB for critical awards or actions required by law.

Impact on Small Businesses

For businesses that rely on federal grants or loans, this pause may result in delays for critical funding. Programs supporting local initiatives, energy development, or DEI-focused activities may face uncertainty during this review period.

While the administration describes this as a temporary measure to ensure alignment with its priorities, small businesses should proactively assess their funding plans and explore alternative resources to mitigate potential disruptions.

Stay Informed and Prepared

Indyblackbusinesses will continue to monitor developments and provide updates. For businesses in need of immediate support, check out our Resources Page for alternative funding opportunities and tools to navigate these challenges.

Read the full memo here.