Can't Pay Rent?
All sorts of businesses have been doing a fraction of their normal business during the pandemic. Some have been more affected than others. Some industries are more affected than others.
Many impacted small businesses are struggling to pay any or all their rent. There are a few approaches you can take to try to mitigate this problem.
Reread your lease. Your obligations will be stated there. Is there any language suspending your rent requirements during an emergency or a forced government closure?
Does your business interruption insurance policy cover a forced shutdown? There is a wide range of policies and it is worth checking.
After reviewing your lease and insurance policy, if you find that your rent is still due, it's time to contact your landlord. It is often in the landlord's interest to work with their tenant while keeping their own expenses in mind such as taxes, insurance, mortgage, and maintenance bills.
Try to negotiate with him or her. They may be very willing to negotiate a new deal. Any new arrangement has to be equitable for both tenant and landlord. Be open and honest regarding your circumstances. Some rents can be made more flexible by having more of the payment based on actual business conducted. Get any new agreement in writing, even if it is by email.
Check for local sources of funding. Towns, cities, and states have made money available for small businesses. Find your local resources by talking to local businesses, asking your chamber of commerce and other business organizations, and doing internet searches.
There is no one answer to having a shortfall for rent for your small business. There are, however, things you can do. This is a good time to involve your attorney. A lawyer should review your lease and insurance policy, strategize with you for landlord negotiations, and review new agreements. Contact Shoffner & Associates, Counselors to Small Business and Families.
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Freya Allen Shoffner, Esquire
Counselors to Small Business and Families.
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