It is no secret that business owners, particularly small business owners, have been hit hard as a result of the COVID 19 crisis. In the blog below, we outline some of the biggest challenges these businesses are facing, as well as possible remedies for their situations.
With the recent social distancing and other COVID-related regulations put into place, businesses are receiving far less revenue than they were before the pandemic.
As reported in May of 2020, 62% of small businesses reported a general decrease in revenue, whereas only 12% reported an increase. These dips in revenue have hurt countless businesses and have even forced many to shut down and destroy livelihoods.
Many businesses rely on goods to be shipped to them in order to operate effectively. With the virus hindering several supply chains, these goods have been unable to ship, and businesses slowed down.
This issue has affected retail stores, healthcare facilities, and manufacturing plants, each reporting an at least 50% increase in supply chain disruptions.
Confusing Reopening Policies
With Calfornia opening everything in stages, it has become complicated and confusing as to which businesses can be open and which ones must remain closed. Even though business owners are on top of and aware of these changes, consumers may not be. Businesses have lost large amounts of revenue and suffered a reduced client base simply because people do not know if they are open.
Where Bankruptcy Fits In
With the above challenges causing businesses to lose money, the bottom line is that businesses are going further into debt. One option for business owners to explore is a Chapter 11 bankruptcy.
Chapter 11 allows business owners to not only get rid of some of their debts, but gives them the opportunity to restructure their payment plan in a way that works for them. To top it all off, businesses are able to maintain their property and keep their doors open to continue earning income during the bankruptcy process.
Contact Our Los Angeles Bankruptcy Team Today
We understand the struggles that the current health crisis has inflicted on small businesses, and we are committed to helping you find financial freedom. We provide experienced and personalized legal counsel to make sure you have the best chance for success.
If you have any questions about how a Chapter 11 bankruptcy can benefit your business, do not hesitate to contact us today through our website or give us a call at (310) 220-4147!