Good Enough Quick Fixes to Keep Your Business Financially Solvent Until Next Month
The DC area has yet to see the downward trend in new COVID-19 cases that the governments of Maryland and DC need to see before they can lift the stay-at-home orders, but the live updates from the Washington Post make it clear that reopening the DMV region is on everyone’s minds. LaQuandra Nesbitt of the DC Department of Health announced that it will probably be two to three months before businesses in DC can reopen. Small business owners in the DMV area are in survival mode as their plans for the near future are so uncertain. Right now, your goal is to ensure that your small business has enough funds to last until the government of DC says it is legal for your company to resume its normal business operations. A Washington, DC business law attorney can answer your questions about sources of funding, the enforceability of agreements, and other concerns related to keeping your small business afloat during the COVID-19 pandemic.
Don’t Hold Your Breath Waiting for Stimulus Loans
On paper, the federal government’s concessions to small businesses as part of the coronavirus stimulus program seem great, but actually accessing the funds is no mean feat. The first round of small business funding ran out or got lost in a maze of glitches before most small business owners in the DC area could even click a link to apply for it. These are some suggestions from CNBC Make It about how your small business can get by until DC lifts the stay-at-home orders:
- Reduce your expenses and overhead. Don’t order any more inventory until DC reopens. If your store has closed, turn off the electricity and water for the next few months so you don’t have to worry about those bills.
- Contact everyone to whom your company owes money and ask about deferring payments, whether through a formal or informal agreement.
- If you have available credit, use your personal credit cards to pay business expenses that you cannot defer.
- If you own a house, take out a home equity loan.
- Seek financial assistance from anyone who might be able to give it to you, whether in the form of a gift or a loan. The annual gift tax exclusion means that, in 2020, any individual can give you a cash gift of up to $15,000, tax free for all parties involved. Even if you would have balked at the idea of asking your parents or in-laws for money before the COVID-19 crisis hit, it might be the thing that keeps you from going out of business.
- File for chapter 11 bankruptcy, in which your business can keep operating, but it must adhere to a debt repayment plan.
Some of these are desperate moves that could be costly in the long term, but these are desperate times. It is a good idea to discuss them with your lawyer before you enter into any new agreements or modify existing ones.
Let Us Help You Today
A small business lawyer can be your lifeline during the economic fallout of the COVID-19 pandemic. Contact the Washington DC small business law attorneys at Tobin, O’Connor & Ewing for help today.