Force Majeure in Contracts
A Force Majeure clause is a contract provision that allows a party to suspend or terminate the performance of its obligations when certain circumstances beyond their control arise, making performance inadvisable, commercially impracticable, illegal, or impossible. Since New Hampshire declared a state of emergency (03/16/2020), the Force Majeure clause could relieve businesses from financial or other obligations, depending on the contract. Always encourage the business to ask for legal help to determine the validity of the business’ claim before acting on the clause.
Loan Deferment (Small Business Loans)
SBA, local small business lenders and Regional Economic Development Councils are offering loan deferment programs of varying timeframes on existing small business loans. Proactively ask the lender about what needs to be provided for case by case decisions. This could help small business cash flow and talent retention. If a small business is NOT able to make payments on its loan, proactive communication with the lender is key!
Business Interruption Insurance or Other Insurance Benefits
Business interruption insurance is a type of insurance that covers the loss of income that a business suffers after a disaster. The income loss covered is usually connected to physical damage due to the disaster-related closing of the business facility or due to the rebuilding process after a disaster.
Businesses should be reporting closures or changes in their business model to their insurance agents as soon as possible to ensure that they have appropriate coverages. If you do experience a significant slowdown, you may want to put a call into your insurance agent to see if you have coverages under your current policy for loss of business income. Additionally, many insurance carriers are updating policies in response to the coronavirus and agents can help business owners navigate these changes. Furthermore, it is important that economic effects on small businesses are documented early in case additional relief or support becomes available in the future.
Economic Development Partners
Local Regional Economic Development Partners are working on customized loan packages available at the local level and based on individual consideration. Regional NH SBDC advisors or the local agency are able to help provide detailed information on available resources as they become available.
Miscellaneous
- Create policies - and document everything (including the reasoning behind the policies).