The coronavirus pandemic has affected thousands of small businesses. Many cannot maintain operations or fulfill contractual obligations. Companies and organizations from all sectors are experiencing severe business interruptions. What can small businesses do to survive?
First, contact your local Small Business Development Center. These amazing people are working day and night answering the most pressing questions, helping small business owners with their applications for state and federal funds, and connecting them with available resources to help sustain their operations. Fran Fernandez, Center Director of the SBDC for CNM’s Workforce Training Center, suggests checking out the NMSBDC website at www.nmsbdc.org. Business owners can register for free confidential business counseling and free live webinar trainings to address and answer questions regarding the SBA Economic Injury Disaster Loan and the Payroll Protection Program applications. Ms. Fernandez says to continue to check in with the SBDC, as new webinar trainings will continue to be added on a regular basis. We have set up a COVID-19 Call Center where people can register online and schedule to speak with a counselor within 24-48 hours of first contact.
Another local expert offers her advice. Linda McCormick, Real Estate Director for Daskalos Development & Investments, says it’s essential to communicate with your landlord. “You don’t want to just stop paying your rent and not say anything.” Ms. McCormick has been advising tenants to apply for the SBA 7-A loan paycheck protection program where 25 percent can be used for rent. This program, aimed at small businesses with 500 or fewer employees, is set up by the government to help businesses continue paying their employees as well as rent. The loan may be 100 percent forgiven if employees are re-hired, but even if businesses cannot re-hire, the pay back is one percent interest over two years.
One thing Ms. McCormick warns about is asking for help when you don’t need it. “Tenants should not ask for rent release when a business is open and operating. That’s annoying,” she says. Doing this could jeopardize assistance in the future if a need truly arises.
Another piece of advice from Ms. McCormick – gather 18 months of sales to show how your business has been impacted. “This way your landlord can clearly see when the drop occurred.”
Lastly, carefully consider how long you are asking for rent deferral. How long will it take you to ramp up again and start paying the current and deferred rent. “Be sure what you are asking for,” says Ms. McCormick. “Make sure that you can sustain sales and perform at the level to pay the increased rent.”