COVID19 - Business Survival Tips

COVID-19 Business Survival Tips

During a pandemic, our central concern is health and safety. But COVID-19 has also wreaked havoc on our national economy and our personal finances. As a small business owner, you are worried about the fate of your company. Having expected long-term growth and success, the current state of the economy is devastating in many ways.

I founded Business Bankruptcy Solutions because I enjoy both law and entrepreneurship. I’ve been a lawyer for almost 20 years and a businessman for more than 30, and I put this powerful combination to work every single day for my clients. I know where you are coming from and I have the legal and business knowledge to help you implement a solution. COVID-19 is the pressing issue of our time, and my goal is to help business owners like you navigate this crisis.

The following is a compilation of survival strategies your business can use to cope. If you would like case-specific counsel and support, please do not hesitate to get in touch with Business Bankruptcy Solutions.

The CARES Act

In response to the pandemic, Congress passed the Coronavirus Aid, Relief, and Economic Security Act, to help individuals and businesses. It includes stimulus payments, forgivable loans, foreclosure and eviction moratoriums, and more. Because the legislation is substantial and complex, I can help you determine which forms of relief your business may be eligible to receive.

The CARES Act also includes temporary adjustments to the Bankruptcy Code. If you are considering bankruptcy or have already filed, you may benefit from the following:

  • Modifying a Chapter 13 plan. If you are suffering significant material losses due to COVID-19, you can extend the terms of your existing Chapter 13 payment plan. Normally, these plans last three to five years, but an adjustment related to COVID-19 can extend the plan to 7 years.
  • Increased debt threshold for Subchapter V of Chapter 11. Chapter 11 Subchapter V is exclusively for small business owners. It allows them to restructure, repay creditors, and reduce debt without losing their companies. To qualify, you would normally need to owe less than $2,725,625, but the CARES Act temporarily increases this to $7,500,000.
  • Protection of CARES Act relief from bankruptcy. In Chapter 7 bankruptcy, you need to demonstrate a sufficiently low income to qualify. In Chapter 13 bankruptcy, your income and revenue dictate the size of your monthly payments. The CARES Act prohibits courts from including COVID-19 federal relief (e.g. stimulus payments, enhanced unemployment, etc.) in Chapter 7 and Chapter 13 calculations.

These adjustments will sunset March 2021, but governments on every level are continuing to help businesses survive the financial consequences of COVID-19. While communities and companies reopen, financial hardship has only just begun for many businesses. Stay up to date on new legislation so you can take advantage of future relief programs.

Force Majeure Clauses

Business contracts ensure that all parties fulfill their obligations to each other. But what if a catastrophic event—such as a pandemic—prevents a business from fulfilling the contractual duties?

The force majeure clause can release a business from a contract in this type of situation. Generally, a force majeure clause accounts for natural disasters, warfare, and other “acts of God” that prevent businesses from carrying out their normal operations and services.

To qualify as a force majeure event, the event must be:

  • Unforeseeable
  • Unpreventable
  • Outside of the contractual relationship

While these basic requirements apply to most force majeure clauses, every clause has unique language that may or may not cover COVID-19. For example, a contract’s force majeure clause may specifically name pandemics in a list of qualifying events, or it may exclude pandemics from events that release businesses from liability.

If your contract has a force majeure clause, you may be able to safely change or even suspend certain obligations without technically breaching your contract. Alternatively, you may be able to hold another business accountable for nonperformance if a force majeure clause did not adequately protect them.

To determine whether a contract has a force majeure clause and whether it applies, I urge you to get in touch. Many businesses have already adjusted their operations, falsely believing they are automatically protected from liability. As a result, they may face future litigation. I closely analyze your business contracts and advise you accordingly.

Business Survival Plan

Before adjusting your operations or business strategy, you will need an accurate assessment of your current financial situation. A profit-and-loss statement and cash flow analysis can help you objectively evaluate what it will take to rescue your business.

Once you have thoroughly evaluated the present circumstances, your next step is to create a survival plan. Your plan should outline the steps you will take (e.g. lowered expenses, adjusted strategy, increased sales, etc.) that will return your company to profitability in a designated number of months.

One powerful investment you can make is a qualified advisory board. Small business advisors with knowledge and experience can review your profit-and-loss statement, strengthen your survival plan, and anticipate obstacles.

Adjust Your Strategy to Meet New Demands

The COVID-19 pandemic has drastically changed the market. Businesses must adapt. Retail companies, for example, must have an online market presence where a consumer can purchase products without leaving their home. The internet has become an invaluable space for commerce, connection, and information, and you may consider investing in internet marketing strategies if you haven’t already done so.

Call (720) 674-7311 or contact Business Bankruptcy Solutions online. We can begin with a free consultation.

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Meet Patrick O'Malley, Esq.

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  • Consultations, No Sales Pitch

    I offer two free consultations. The first meeting is to learn your facts and goals. Then my team researches and strategizes. I present your options in the second zero-pressure meeting.

  • Unique Approach

    My experience and perspective make me the ideal bankruptcy consultant. I deliver serious value to my clients by customizing ideal solutions for your goals and business operations. You will save a great deal of enterprise value by using good pre-bankruptcy planning.

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    I’ve had business setbacks too. Stress, uncertainty, loss; I know what you are going through. You do not need to face it alone. I care about your goals. I want to help.

  • Decades of Experience

    I have been a lawyer for 19 years and a businessman for 30 years. I approach cases simultaneously as a lawyer and a business owner to determine the strategy and tactics.

Retain Professional Support

While a financial crisis may encourage you to cut as many costs as possible, obtaining qualified help is a necessary element of your survival. I founded Business Bankruptcy Solutions to help business owners like you overcome severe financial adversity. The future of your company may be at stake, and I want to help you survive today and thrive tomorrow.

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