At Husch Blackwell we understand the financial hardships our startup clients are facing in the midst of the COVID-19 pandemic. We know you are facing challenges in your business and would like to recommend that you take a moment to review the questions below as you plan the next steps your startup should take.
Is Your Business Essential?
As states issue shelter at home orders, businesses deemed non-essential are closing. While guidance varies by state, there are often exemptions for specific essential businesses or those industries supporting essential businesses. If you qualify, you may need to take some steps to confirm your company may remain operational under an exemption and get your workers the proper paperwork to explain why they are out on the streets. You can find the latest guidance for your state at Husch Blackwell’s COVID-19 State-by-State Guidance Resource Center. One of our attorneys can help you to determine and draft any additional documentation needed to support that you are running an essential business.
Is Your Business Eligible for the CARES Act SBA Loan Program?
The COVID-19 pandemic has prompted the U.S. government to respond with the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the largest economic stimulus plan in history. Husch Blackwell has developed a page for FAQs that covers topics like eligibility, the funding offered, what can be paid for using the money, lending criteria, and the ability to coordinate with other loan programs. If you have an existing lender, reach out to them early to understand if they have any additional documentation required beyond those listed in the CARES Act.
Is Your Business Eligible for Economic Injury Disaster Loans (EIDL) and Emergency Economic Injury Grants (EIDL Grants)?
The CARES Act sets out new rules that make it easier for small businesses that were damaged by closures, or had other losses, due to the coronavirus to apply for and receive loans quickly. One option is to apply for the SBA’s EIDL Program. This program provides small businesses with working capital loans of up to $2 million to help overcome the temporary loss of revenue as the result of a declared disaster. A borrower can apply for an EIDL loan and receive an advance in the form of a $10,000 EIDL Grant within 3 days, if an advance is requested. Our CARES Act FAQ page lists additional eligibility requirements and the process for applications for loans made from January 31, 2020 to December 31, 2020.
Does Your Business Have Other Legal Needs?
We recognize your business may be changing rapidly under the current crisis. We’ve heard from startup clients that events are being canceled, supply chains are being disrupted, and leases may be hard to pay. Many clients are facing a changing workforce, switching to working from home, concerns about foreign national employee’s and visa requirements, and even layoffs. We recognize business is no longer usual or normal.
