Borrowers/Tenants & Lenders/Landlords: 3 Things to Do Now During COVID-19 Outbreak
March 16, 2020
As the world navigates through the uncertainty of the coronavirus (COVID-19) outbreak, there is disruption across the economic spectrum that could be felt for months or years to come.
Even with this uncertainty, there are actions that borrowers, tenants, landlords and lenders can take now to mitigate risk in their businesses.
- Do not stick your head in the sand. Call your lender or landlord today and openly explain your situation. Your lender or landlord already knows what is going on in the world, and there is no benefit in hiding how it is affecting you. In fact, waiting until you are in dire straits is the worst thing you could do.
- Keep informed of any rules and regulations. Nothing is in place yet, but based on what happened in 2008, we suspect there will be rules and regulations instituted by the government to assist companies with temporary cash flow problems. LP will keep you updated as we learn what is being implemented to require lenders to work with customers. Similarly, we expect landlords to work with their tenants.
- Consider your options. If you feel you are already in dire straits, LP can help you identify your options. Bankruptcy can help stave things off. Hopefully, what we are experiencing is only temporary and bankruptcy can give you the time you need to right the ship once things return to normal.
- Get your house in order. Review your loan documents and lease now and determine if there are any holes. You will want to be prepared with your documents in case the downturn is longer lasting. LP will review your files at no cost or with minimal cost, based on scope and your needs regarding this situation. If there are any concerns in your documents, we can draft what you need to shore things up.
- Reach out to your borrowers/tenants and offer help. LP can amend your loan documents or leases quickly if you need it.
- Protect your position. If your customer or tenant files bankruptcy, consider attorney guidance. There are many things you need to do as a secured or unsecured lender (or as a landlord) in the first few days of the bankruptcy in order to protect your position.
For more resources and LP's response to COVID-19, visit this webpage.