Thoughts on Commercial Solutions During Pandemic

The following is not legal advice but things that came out of interactions with clients during the COVID-19 outbreak.

Federal, State and Local Programs

The CARES Act and the follow-on laws that may come give money and authority to the Treasury, but it and its agencies do not want to be in the direct support to businesses and individuals.  Other than the stimulus payments, many of which have been made, the programs are administered by the Small Business Administration (the EIDLs), the SBA through banks and other approved financial institutions (the Paycheck Protection Program (the “PPP”), up to 500 employees with some exceptions) or banks and other approved financial institutions (the Main Street Programs, up to 10,000 employees).  The law is immense, and although some feel that it is as yet inadequate, it is being implemented quickly.  The PPP is reportedly already close to being, or already, out of money, and the Main Street Programs (in which the Treasury agrees to arrange for the purchase of loan participations by financial institutions with 5% risk being retained) has not started yet.  But with such a large bill and rapid implementation, application in specific cases and definitions are being worked out and the thing is a moving target.  One result is that the SBA and financial institutions are prioritizing their existing customers and relationships.  Companies that do not have strong relationships might consider joining forces with or arranging for those that do to make contact for them.  The other thing is that fintech and other companies that may not yet have customer relationships are slowly getting into the game, and companies should think about building new relationships with them.  That said, care should be taken to legitimize as much as possible to avoid difficulties or even fraud.


Before the pandemic, many companies were considering acquisition or sale of part or all of a business.  For a number on reasons, including a sudden change of revenue or other significant changed circumstances, the efforts have been put on hold.  Many firms that were looking for buyers are in dire circumstances.  It is possible that the intended buyer can be a temporary source of financing where the business is either collateral or the price is adjusted to take account of the assistance without consummating a sale now.  Needless to say, careful documentation should be used, but in truth this is unlikely to be standard.  Another approach is a standstill agreement, where the two main parties want to go forward when the pandemic allows, but the diligence will need to be done later or redone, and the price will need to be adjusted.  In many cases, the parties currently cannot pay lawyers, but lawyers can help by being flexible about payment terms or even being compensated only from proceeds of the transaction, if and when they materialize.


Distribution chains, both from the supply and the finished product perspective, have often been disrupted.  A review and possible revision of any distribution contracts should be done.  In fact, distribution may be quite different after the pandemic, and the revised agreements should take that into account.

On-Line Sales

The world has gone heavily to on-line sales.  This may continue even after the pandemic.  Preparation of new agreements or review of them may be in order.  Some are for the ability to work thought an on-line company, or to strike out on ones own and sell through a website.