Owning and operating a small business can be exciting and financially rewarding. Many entrepreneurs enjoy independence, control, and opportunity for financial gain. Rewards come with risks, however, and the current COVID-19 pandemic has exposed small businesses to unforeseen difficulties and challenges. Over the years, MacMain, Connell & Leinhauser has provided counsel to many small business owners. Today, we are prepared to help our clients with very challenging small business issues that many are facing during the current COVID-19 outbreak.
The scene along a typical American business district in June 2020 is starkly different than it was just a few months ago. In many business districts, foot traffic is way down, and some long-established shops have closed their doors. Even as some businesses begin to reopen under new restrictions, no one knows when business as usual will return. According to a survey conducted by the Small and Medium Business Group, small businesses employing less than 20 employees have been hit the hardest. They were the first to stop hiring subcontractors, lay off workers, or reduce hours. The survey also reported that the retail, restaurant, and personal service sectors have suffered the most.
The negative impact on the American economy cannot be overstated. According to the Small Business Administration (SBA), businesses with less than 500 employees account for nearly half of the employees in the United States. Main Street America (MSA), a network of over 1,600 commercial districts comprising of approximately 300,000 small businesses, recently conducted a survey that projected millions of small businesses closing permanently if the COVID-19 pandemic continued into the summer and beyond. The survey also revealed that small business owners cite the need for financial assistance and penalty-free extensions on expenses to stay open.
There are options that businesses can explore to stay afloat temporarily, including deferring tax payments, examining existing insurance policies for clauses pertaining to business continuity/business interruption coverage, and applying for various types of SBA loans and debt relief. SBA-backed programs include the following:
Because these measures provide only temporary relief, more may be needed for a company to remain afloat. In the long-term, small businesses may want to examine the specific underlying causes of their vulnerability and enlist the help of professionals to restructure the way they do business.
The SBA has identified key areas of vulnerability that small businesses may encounter as the pandemic unfolds, including the following:
America’s Small Business and Development Centers (SBDC) are continually updating a national joint study on the impact of COVID-19 on small businesses. Data from the mid-May 2020 study indicated the following:
If the pandemic continues, small businesses seeking to stay in operation may want to enlist the assistance of a small business attorney to respond to the new environment and institute changes to adapt. Matters in which professional legal counsel can be of great benefit during these uncertain times include the following:
Small business owners may have been hesitant in the past to reach out for legal assistance. Today in the face of COVID-19, the very survival of a business may depend upon skilled legal guidance. We are available to provide the support needed to continue operating successfully.
The small business attorneys at MacMain, Connell & Leinhauser have helped many small businesses in the past with serious legal issues, and we stand ready during the pandemic to help new and existing clients with unforeseen challenges. If you have legal questions arising from the impact of COVID-19 on your business, reach out to us today by calling 484-318-7106 or fill out our online form for an initial consultation. We are able to conduct meetings via phone or videoconference. We serve clients throughout New Jersey and Pennsylvania, including Philadelphia and Chester County, from our office in West Chester, Pennsylvania.