Even if you have have operated your business in the most prudent of manners, it is likely that you still have at best, enough reserve capital to operate your business for three months without bringing in any or very little new revenue. In the wake of the Coronavirus pandemic and the government mandated business closures and in some cases statewide lock downs of all citizens, it is an incredibly stressful time for business owners. It is difficult enough for a small business to withstand a decrease in revenue, but nearly impossible for a business to sustain a complete loss of revenue for any extended period of time.

It is estimated that the restaurant industry alone will lose over $225 billion over the next three months, and they are not alone, almost every industry is hurting. So, how does a small business rebound?

small business administration coronavirus relief programs

Apply for low interest loans from the Small Business Administration to offset lost revenue and bridge the gap until your business can reopen or at least get back to something resembling normal operations.

The SBA is providing low-interest working capital loans of up to $2 million to small businesses and nonprofits affected by the coronavirus in presidential and SBA-declared disaster areas. State governors must request access to the Economic Injury Disaster Loan program for businesses located in their states.

These loans carry an interest rate of 3.75% for small businesses and 2.75% for nonprofits. Loan repayment terms vary by applicant, up to a maximum of 30 years. 

Apply online and select “Economic Injury” as the reason you’re seeking assistance. You will have to supply your latest business tax return, your personal financial statement and a list of all your current liabilities.

NJ state small business loans and grants

Presently, the State of New Jersey Economic Development Authority does not offer any programs specific to small businesses impacted by the coronavirus. However, the NJEDA indicates to check its website frequently for updates on programs that may be instituted. The NJEDA does generally offer loans and grants for small businesses. You can check here to determine if you are eligible for any of these grants or loans.

corporate loans and assistance

You should check with your current bank or lender, most are offering deferment or forbearance programs to their present customers. If you can push payments off for even a few months that can help your business weather the storm. Here is a list of lenders offering assistance.

sub-chapter v small business reorganization

Even with help from your present lender or financing from a new lender, your small business may be facing an uphill battle to recover from the economic impact created by the coronavirus pandemic. Or perhaps, the temporary cessation of your business may create the perfect opportunity for you to reset and rethink your business. There are other options to help you recover and reorganize.

Sub-chapter V under Chapter 11 was passed into law as of February 1, 2020. Sub-Chapter V is a vehicle for small businesses to reorganize in a much more economical and expedient manner than they previously could under Chapter 11. Previously, Chapter 11 was cost prohibitive to many small businesses and for those that could afford to file, it was very difficult to confirm a plan of reorganization.

The enactment of Sub-chapter V has changed that and provided a needed solution for small businesses experiencing financial issues. Sub-chapter V can be a strong financial tool that you can use to save your business and protect your future. You should contact an experienced bankruptcy attorney to review how Sub-chapter V can help you.

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