If you think that you, a small business owner, have financial worries, think about the people who work for your business for an hourly wage. No matter what kind of business you operate, you are probably trying to think of an emergency strategy. If you own a restaurant that is now operating on a carry out and delivery only basis, you might be trying out strategies for keeping your delivery drivers safe, such as having your drivers wear masks and gloves or making sure they leave the bags of foods on customers’ doorsteps and sending a text message to notify them, so they don’t have to have direct contact with customers. Meanwhile, while you worry about covering the cost of overhead, your employees are worried about being able to afford their groceries and utility bills. The good news is that you might not have to lay off any employees even if your business has to operate at reduced capacity or not at all for the next few months. An Alabama business law attorney can help you choose the best solution.
Forgivable Loans for Small Business
Supporting small businesses is central to the federal government’s stimulus plan to help offset the economic disruption caused by the coronavirus pandemic. The stimulus includes $349 designated as the Paycheck Protection Program. This initiative allows any business that employs 500 employees or fewer to borrow $10 million or enough money to cover payroll for two and a half months, whichever is less. You can later apply to have the loan forgiven if you show that you put the money toward payroll. A variety of entity types, including corporations, sole proprietorships, and nonprofit organizations, among others, are eligible for these loans. You can apply through any participating bank; you do not need to apply directly from the government. Before you can receive the money, the Small Business Administration will verify that your business has not already received another loan from the program.
Rotating Furloughs: A Good Enough Solution
Mark Cuban of Shark Tank urges small business owners to apply for forgivable loans before the money runs out. If you cannot get the loan money, another option is to make a rotating furlough schedule for your employees. In other words, if you can only afford to pay half of your employees, you can have each employee work every other week. This way, you will not have to lay anyone off. If your employees can receive half of their pay, it is less devastating than having to decide who to lay off, and no one will have to start from zero looking for a new job when it is time to reopen for business.
Let Us Help You Today
A business law attorney should be part of your plan for getting your small business and your employees through the COVID-19 crisis. A good place to start is by discussing your options with the Alabama business & corporate litigation attorneys at Cloud Willis & Ellis.