Shutdown Survival: Build a 14-Day Cash-Flow Plan (That Actually Works)
Another shutdown. Another round of unpaid invoices, paused projects, and silence from contracting officers. If you’re a small or mid-sized government contractor, you don’t have time to wait and hope. You need a plan, now.
This post breaks down exactly how to build a 14-day cash-flow survival strategy to weather a federal funding freeze. It’s not theory. It’s built for real-world survival, so you can keep the lights on, protect your people, and come out the other side stronger.
What’s Going On
The ongoing federal government shutdown has frozen many payments, halted task orders, and paused award processing across agencies. SBA lending programs like 7(a) and 504 are on ice. Contracting officers are furloughed. Guidance is inconsistent at best.
But here’s what we do know: unless your contract is pre-funded or deemed essential, you’re not getting paid anytime soon. And for small businesses holding 8a contracts, SDVOSB set-asides, or WOSB certification, the risks are even more acute.
Why This Matters for Contractors
If you’re waiting on checks from Uncle Sam to make payroll, you’re not alone. But hope isn’t a strategy.
For firms pursuing SBA 8a certification assistance, women business certification, or disabled veteran small business certification, liquidity can be the difference between staying eligible and falling out of compliance. For those writing proposals, chasing SBIR grants, or navigating the government contracting certification process, delays now can snowball into long-term pipeline issues.
Bottom line: Cash flow is king. And your next two weeks will define your survival window.
Your Action Plan: Week by Week
Here’s how to take control, day by day, dollar by dollar.
Days 1–2: Immediate Financial Triage
Run your 14-day burn rate. Calculate exactly what’s in the bank, what you’re owed (especially from federal clients), and what must be paid. Separate fixed vs. variable costs.
Protect payroll first. Prioritize salaries, benefits, insurance, rent, and loan payments. Defer everything else.
Call your bank. If you don’t already have a line of credit, now’s the time to ask. With SBA loans frozen, commercial bridge financing might be your only short-term lifeline.
Start documenting everything. Idle labor, paused work, vendor costs, all of it. This will be essential for future REAs or CPARS justifications.
Days 3–5: Chase Every Dollar
Send invoices immediately. Even if the agency can’t pay now, get your deliverables into their system. That includes progress billings and early-billed milestones.
Communicate with COs and primes. Keep them looped in, especially if you’re a subcontractor. If there’s any task that can legally continue, confirm it in writing.
Renegotiate terms with vendors. Ask for extended payment windows. A one-week delay might save your cash flow.
Days 6–8: Tap Short-Term Financing
Explore SBA disaster loans. While 7(a) and 504 are on hold, disaster loans are funded through no-year appropriations and still available.
Use invoice factoring (cautiously). Some factoring firms specialize in federal receivables, just be sure the invoices are collectible.
Borrow only what you can repay. Model your post-shutdown cash flow. Don’t bury yourself in debt you can’t dig out of.
Days 9–11: Cut Without Compromising Delivery
Slash all discretionary spending. Travel, ads, consultants, pause it all.
Preserve delivery capability. Keep insurance active, secure leased spaces, and maintain IT security. Don’t risk a CPARS hit or contract default.
Redeploy your workforce. Use this time for internal audits, grant writing for nonprofits, or non-billable SBIR grant assistance prep. Get value even during downtime.
Track cost-cutting. This helps you later justify actions to the government and protects your performance record.
Days 12–14: Plan for the Long Haul
Model 2-week, 4-week, and 8-week shutdowns. Run worst-case scenarios. Use real numbers.
Set cash triggers. Decide now when you’ll freeze hiring or cut subcontractor spend. Take emotion out of the equation.
Prepare for the restart. When funding returns, you need to be ready. Staff recalled, vendors aligned, contracts ready to resume. And don’t forget, submit your claims fast. Most REAs have a 20–30 day deadline after funding resumes.
The Big Picture
This shutdown, and any future one, isn’t just about lost revenue. It’s about resilience.
If your business relies on 8a certification assistance, SBIR Grant Assistance, or Government Contract Proposal Writing, this isn’t just survival. It’s strategy.
Use this time to reinforce your systems, revisit your NAICS code for government contractors (or the best NAICS codes for small business based on FY25 trends), and ensure your government procurement positioning is solid.
Contracting may be paused, but your planning shouldn’t be.
Want to go deeper?
Check out our related post: Shutdown Turmoil at the Education Department: What Service Vendors Need to Know Now.
If you aren't a Squared Compass partner, what are you waiting for? From getting your business set up with specific government set-aside programs at both the State and Federal level, to being empowered by a Fractional Capture team to win government contracts, to receiving tailored government contract opportunities Squared Compass delivers immense value which helps propel our partners to success. Schedule a chat with our team today.
