We know you, like us, are spending time considering ways to weather the current crisis. The pandemic is changing much of the commercial environment. It need not be all bad. The circumstances, while challenging, also present opportunities to accomplish things now that would normally be economically or legally out-of-reach or, at a minimum, more difficult.
We see the following topics needing immediate attention as the opportunities they present may shortly disappear:
Restructuring of contracts no longer economically advantageous.
Business agreements of all types, whether with vendors, customers, investors, may no longer make sense. Now is an opportunity to review each and renegotiate terms or, in some cases, terminate them entirely if doing so benefits your organization.
A corollary to that is reviewing employee assignments and terms. The employment relationship is complex. The global crisis is not the time to take undue advantage of that. However, when an organization finds itself with its back against the wall, there may be few options. Now is the time for an honest exchange with employees on how they can best work with you in this environment.
Most budgets can be thrown out–the pandemic has rendered them obsolete. This is true as well for tax planning. Changes through the recently-passed CARES Act impact federal and state tax burdens. Now is the time to schedule a review with your tax advisor.
Financing for business diversification, expansion, or working capital.
Federal and state laws, including the CARES Act, have introduced several funding sources on preferential terms and underwriting guidelines. Organizations with under five hundred employees in the United States will benefit especially, as will those in healthcare and green technology. The funds can help you retain skilled staff, offset short-term losses, or any one of a number of other financial moves to strengthen a competitive position.
Rapid progress on legislative priorities.
The CARES Act at the federal level, and similar legislation at the state and local level, reveal already
that key legislative priorities of many sectors in the economy have moved, and moved significantly, through the current crisis. Organizations with active government relations programs have done well. Even those without their own program can nevertheless make progress through trade associations or issue advocacy focused on specific concerns. Rather than turn inward, the current pandemic can be a great opportunity to get engaged.
There is no question that the global economy will emerge from the current crisis eventually. The challenge is predicting when that will happen. Organizations using this crisis as an opportunity will find themselves more competitive when it does.
This is just a quick overview. Naturally, whether or not there is a problem in a particular case requires more information. If we can help with that, please let us know.
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