April 28, 2020

As governments around the world took swift and crucial actions to limit the spread of the pandemic, businesses, of every size, and in every industry, are being forced to rapidly adapt while having to simultaneously navigate massive financial and operational challenges.

The COVID-19 crisis has forced many businesses to temporarily shut down, causing issues with cash flow, revenues and payroll. While several of these businesses have applied for SBA loans, grants and the Payroll Protection Program, due to red-tape and mismanagement, many businesses have yet to receive any funds from these various grants and loans. Nonetheless, collecting on debts owed to you is still possible.

If you want to improve your chances of success and get paid on the amounts owed to you NOW, follow these three tips:

1.     Be flexible.  These unprecedented times are forcing businesses to enter into extended payment plans with creditors. While you might already be engaged in a payment plan with a debtor, you may have to re-negotiate the payment plan which includes, lower monthly payments, balloon payments, or an extended payment plan.

 2.     Extend Trade Credit. In order to re-open, businesses will have to rely on the extension of trade credit.  Businesses must make a sincere effort to pay outstanding debts BEFORE they can receive additional trade credit. This is also a good opportunity for new trade credit to be secured by a personal guarantee.

3.     Be patient. Unfortunately, the courts are currently closed during the pandemic. However, the courts will re-open soon and the commercial collection cases will resume, motions will be heard and arbitrations and trials will commence. Once the courts re-open, it is also an opportunity to file new cases and collect from businesses who may have received loan proceeds by this time.

Even though many businesses are operating under unusual circumstances, you can still be proactive in collections. For further guidance and advice on how to navigate collections during this time, please contact us today.

If you want to learn more about Lichtman Eisen Partners or think we may be able to help you collect on an outstanding debt, please contact us today.