CLEVELAND, Ohio — Legal expert Rob Glickman of McCarthy, Lebit, Crystal & Liffman, says he plans on assisting small business owners in identifying and navigating through the changes and challenges they're facing due to COVID-19.
- Don’t assume you’re in the clear when it comes to your contract
- Companies run the risk of defaulting on their lease or loan agreement once they begin producing products that would change their business purpose
- Smalll business owners affected by COVID-19 can find free legal advice and resources on the firm's website
Glickman says when it comes to the pandemic, questions regarding the impact on small businesses are being answered each day, like what is actually considered a small business?
“A small businesses is defined based on the industry it’s in and the category of business that it’s in, but right online. At the Small Business Association, you can do it, you can look right up and see whether or not you qualify as a small business, and that varies based on your number of employees and your gross revenues,” Glickman said.
He says every small business qualifies for some type of assistance to help meet their financial obligations.
“You have been ordered by the government to shut your doors. and normally, if a government action prevents your performance, that renders the defense of impossibility available to you,” Glickman said.
So what aid is available to them?
“There are an awful lot of resources that are available to them and more coming online and available to them every day through both state and federal agencies. Everyone right now, especially those businesses that are subject to closure in Ohio that aren't what the government has deemed a necessary business, are worried about their rent, they’re worried about taxes, they're worried about employees, and resources are out there for them,” he said.
The Small Business Administration is offering essentially disaster loans up to $2 million that they can apply for at a relatively low interest rate, 3.75 percent for businesses, 2.75 percent for nonprofits. Those loans can be used to tide them over during this period. They can be retained over 30 years.” Glickman said.
What options do businesses have to postpone various financial obligations, such as lease payments?
“The first thing you do before you look outside of the contract for common law remedies, look to the contract. Most contracts, including commercial leases, have a force majeure clause, it essentially, force majeure means superior force, something has happened that neither of the contracting parties could have predicted and render one of the party's ability to perform impossible. So, you look to see if your contract has a force majeure clause, you then look to see if something like the coronavirus is excluded from it, and very well may be,” Glickman said. “The parties to the contract, whether it be a landlord and a tenant or an insurance company and an insured, looks to the specific language in the contract and makes a determination whether or not that is available to you under the contract and there may be disputes about that and I, I imagine there will be disputes about that.”
Glickman says business owners may not always know how to advocate for themselves, or find common law remedies beyond what may be written in a contract. He suggests that they talk to a lawyer.
“I would always suggest that you try to get legal counsel in here, because otherwise you really could miss things that are available to you. If you can't afford a lawyer, there may be resources in your respective communities. If you have a local law school here in Cleveland, for example, both Cleveland Marshall College of Law and Case Western Reserve School of Law have already had legal clinics that provide free, free advice, you may have a legal aid society in your community.” Glickman said.
Glickman says if you are a small business owner affected by COVID- 19, you can find free legal advice and resources on their website.