As we complete the first month of New York State’s PAUSE response to the COVID-19 pandemic, many small businesses, particularly including certain cooperative apartments buildings are now beginning to feel the “pinch” of decreased revenue resulting from laid-off or furloughed residents who are not able to meet their monthly obligations.
Arguably, there are many paths to take when considering the financial obligation of a cooperative corporation while maintaining required fiduciary responsibility. Certainly board treasurers, building managers along with corporate attorneys and accountants should all be part of a corporation’s coordinated response to the current and unprecedented crisis, and they may wish to consider the following:
- The Federal government recently passed the CARES act which may be the source of some relief through the Paycheck Protection Program or from an Economic Injury Disaster Loan.
- Corporate mortgage payment deferrals may be offered by some banks upon appropriate application and qualification during the current crisis.
- Existing board policies may need to be revisited, with late fees and penalties due to just cause considered on a case by case basis.
New York City is offering grants up to $27,000 to businesses with fewer than five employees, and zero interest loans up to $75,000 to businesses with fewer than 100 employees, that have suffered a decrease in revenue of 25% or more due to the COVID-19 pandemic.
- The New York City Employee Retention Grant program provides a grant to certain small businesses to help retain employees.
- The New York City Small Business Continuity Loan Fund provides a zero-interest loan to businesses that have seen a significant decrease in revenues.
Information about these two New York City programs can be found here.