Options For Businesses Affected by COVID-19

COVID-19 Business Interruption Attorney
  • Apr 22 2020

 

Options For Businesses Affected by COVID-19

 

On March 11, 2020, the World Health Organization (WHO) officially categorized COVID-19, also known as CoronaVirus, as a pandemic, raising the health emergency to its highest level. In the past few weeks, the virus has spread at an unprecedented rate, causing most cities and towns throughout the world to effectively shut down. Inevitably, this has caused major issues for the economy, and therefore for businesses throughout the world.    So what should you do if your business was affected or closed due to Covid-19?

File a Business Interruption Claim With Your Insurance

Business Interruption insurance is a type of insurance that covers the loss of income that a business suffers as a result of a covered cause of loss. Most general business insurances have at least a partial or limited coverage for losses sustained as the result of business interruption.

Although many companies have business interruption coverage, most insurance companies are denying business interruption claim arising from COVID-19 siting virus exclusions, physical damage requirements, and other reason.  It’s important not to give up as insurance companies regularly deny claims and delay payments.    If your claim for business interruption due to COVID-19 was denied, underpaid or delayed our team of experienced business insurance lawyers can help you obtain the maximum compensation you are entitled to.

WAS YOUR BUSINESS AFFECTED BY COVID-19?

CONTACT US FOR A

FREE CONSULTATION

WITH

AN EXPERIENCED BUSINESS INSURANCE ATTORNEY

ABSOLUTELY NO FEES UNLESS WE WIN

C19@Zinkovetsky.com

212.729.4090

 

Economic Injury Disaster Loan Program

 

The United States Small Business Administration (SBA) is to providing targeted, low-interest loans to small businesses that have been severely impacted by the COVID-19. The SBA’s Economic Injury Disaster Loan program provides small businesses with working capital loans of up to $2 million that can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing.

The loans can be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. The interest rate is 3.75% for small businesses. The SBA offers loans with long-term repayments of up to a maximum of 30 years. Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay.

Once a declaration is made for designated areas within a state, the information on the application process for Economic Injury Disaster Loan assistance will be made available to all affected communities as well as updated on the SBA website.

For more information, please visit: https://www.sba.gov/disaster-assistance/coronavirus-covid-19.

Access to Capital

 

The SBA provides a number of other loan resources for small businesses to utilize in the operation of their business. Here is a list of some of the loan programs currently offered by the SBA:

  • 7(a) program offers loan amounts up to $5,000,000 and is an all-inclusive loan program deployed by lending partners for eligible small businesses within the U.S. States and its territories. The uses of proceeds include: working capital; expansion/renovation; new construction; purchase of land or buildings; purchase of equipment, fixtures; lease-hold improvements; refinancing debt for compelling reasons; seasonal line of credit; inventory; or starting a business.
  • Express loan program provides loans up to $350,000 for no more than 7 years with an option to revolve. There is a turnaround time of 36 hours for approval or denial of a completed application. The uses of proceeds are the same as the standard 7(a) loan.
  • Community Advantage loan pilot program allows mission-based lenders to assist small businesses in underserved markets with a maximum loan size of $250,000. The uses of proceeds are the same as the standard 7(a) loan.
  • 504 loan program is designed to foster economic development and job creation and/or retention. The eligible use of proceeds is limited to the acquisition or eligible refinance of fixed assets.
  • Microloan program involves making loans through nonprofit lending organizations to underserved markets. Authorized use of loan proceeds includes working capital, supplies, machinery & equipment, and fixtures (does not include real estate). The maximum loan amount is $50,000 with the average loan size of $14,000.

SBA also offers a free online referral tool called Lender Match that helps connect small businesses with participating SBA-approved lenders within 48 hours. For more information, please visit: https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources.

NYC Assistance and Relief

On March 8, Mayor Bill de Blasio announced that the City would provide relief for small businesses across the City that are seeing a reduction in revenue due to COVID-19. This relief will be provided via two avenues, the NYC Employee Retention Grant Program, and the NYC Small Business Continuity Fund.

 

Under the NYC Employee Retention Grant Program, the City is offering small businesses with fewer than 5 employees a grant to cover 40% of payroll costs for two months to help retain employees. In order to qualify for this grant, businesses must (1) be located within the five boroughs of New York City, (2) Demonstrate that the COVID-19 outbreak caused at least a 25% decrease in revenue, (3) Employ 1-4 employees in total across all locations, (4) Have been in operation for at least 6 months, (5) Have no outstanding tax liens or legal judgments. For more information, please visit: https://www1.nyc.gov/nycbusiness/article/nyc-employee-retention-grant-program.

Under the NYC Small Business Continuity Fund, businesses with fewer than 100 employees who have seen sales decreases of 25% or more will be eligible for zero interest loans of up to $75,000 to help mitigate losses in profit. In order to qualify, businesses must (1) be located within the five boroughs of New York City, (2) demonstrate that the COVID-19 outbreak caused at least a 25% decrease in revenue, (3) employ 99 employees or fewer in total across all locations,  (4) demonstrate ability to repay the loan, (5) have no outstanding tax liens or legal judgments. For more information, please visit:  https://www1.nyc.gov/site/sbs/businesses/covid19-business-financial-assistance.page.

 

 

WAS YOUR BUSINESS AFFECTED BY COVID-19?

CONTACT US FOR A

FREE CONSULTATION

WITH

AN EXPERIENCED BUSINESS INSURANCE ATTORNEY

ABSOLUTELY NO FEES UNLESS WE WIN

C19@Zinkovetsky.com

212.729.4090

 

 

 

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