Will the Covid Vaccine Rescue Small Businesses?
The federal government has recently approved several vaccines for the novel coronavirus, and truckloads of shipments have been arriving in Florida. But will the vaccine be a game changer that rescues our slumping economy?
Since the pandemic broke out in March 2020, the South Florida economy has been hammered. Our region has seen over 3,000 businesses shut down, and thousands more closures could be on the way. Although we hope the vaccine speeds up the return to normalcy, the reality is that our small businesses could continue to be in financial trouble.
Light Bankruptcy Filings in November
We have watched closely as some of the nation’s most famous chains fell into Chapter 11 bankruptcy over the past six months: JCPenney, Gold’s Gym, and Neiman Marcus were only some of the most prominent. However, the number of large companies filing for bankruptcy has fallen in recent months.
According to Bloomberg, November had the fewest Chapter 11 bankruptcy filings since the pandemic began. This positive trend has made some people optimistic that we might have seen the worst of the business bankruptcy wave already and that the vaccine will encourage consumers to return to their old spending habits.
We aren’t quite so optimistic. For one thing, Bloomberg keeps its eye on the largest companies—those with at least $50 million in liabilities. As experienced small business bankruptcy lawyers in South Florida, we have our fingers on the pulse of the smaller business community. And, unfortunately, we are still struggling.
Some Industries Will Not Return
How will the pandemic permanently alter spending? The recent trend toward virtual meetings and conferences could become permanent. Companies that used to book convention sites and hundreds of hotel rooms for conferences might permanently transition to holding virtual meetings for their companies, in a move that will save money.
The average consumer’s behavior could also change. Already, more and more people have been shopping online, and that trend could accelerate. Those who used to shop in physical stores might have made a permanent shift to buying online. Consequently, retailers will build out their online shopping platforms, and many will probably cancel their leases in a bid to stay solvent.
Can Filing for Chapter 11 Help?
Small businesses with crushing debt loads have the option of restructuring that debt with a small business Chapter 11 filing. This bankruptcy is an alternative to Chapter 7 liquidation. Instead of shutting down, you can continue to do business as you work out ways to reduce your debt pile.
Congress has helpfully made Chapter 11 attractive to small businesses with recent changes to the law. Many of the onerous paperwork requirements have been lifted or simplified. Our attorneys can help your firm through the process so that you emerge leaner and better positioned to thrive in the post-COVID world.
Contact Us Today
Nowack & Olson, PLLC has tackled all kinds of business bankruptcies. We can analyze what will be in your firm’s best interest. Please call us today to schedule an initial consultation with our Plantation bankruptcy lawyers.