By Michael J. Liss, Esq.

As medical practices and other companies emerge from their own version of COVID-19 lockdown, business owners must adjust to new realities and deal with realities they’ve avoided. Since this crisis started, our firm has advised business owners “off the ledge” by providing some basic advice. Allow me to share some basic tips which will help your business weather whatever follows.

Now is the time for your company to engage in frank conversations with the most important of its business relations. Vendors, landlords and banks are all also facing new realities and dealing with those which they have avoided for some time. Consider that your vendors want to get paid, as does your landlord and bank. Each of them has some right to payment. You may be wondering how your company can manage to pay all of the bills to each. That’s where understanding the mindset of the other is important. This is a time when “everything is negotiable” should be front and center in the mind of all business owners.

Consider vendors. They depend on a medical practice’s continued business and they depend on the practice’s current payment. They depend on your business’ ability to avoid bankruptcy. If you have to repay your business loan to a bank and pay rent to a landlord, the vendor is not a priority. Except your practice can’t operate without essential equipment. This is an excellent opportunity to renegotiate terms with the vendor. The vendor needs to sell and get paid. If you stop buying, they don’t get paid. An approach is to discuss with your vendor the amount or timing of payments. “Everything is negotiable” could lead to a conversation about payments being made 25% upfront with 25% per month of the balance in following months as business picks up, even if the vendor is used to being paid on the spot, same-day. In the vendor’s mind, they still sell the same and receive the same payment-just over a period of time. The vendor waits while you get your footing back, but is paid the same amount within a few months, and the vendor maintains an ongoing relationship.

You have to pay the landlord or you’ll be evicted. Consider that the last thing a commercial landlord wants right now is a vacancy. As businesses learn that they can largely operate remotely, office space is looking to many like a thing of the past. Landlords are panicking over losing tenants due to nonpayment, but also due to tenants simply allowing leases to expire. “Everything is negotiable” not only says that you can spread out your rental payments which are past due or are coming due while your business is less than full speed, but that this is a good time to have a conversation with the landlord about your lease. Beyond repayment of back rent, this is also a perfect time to renegotiate the lease terms altogether. Most landlords would give serious concessions to a good tenant which the landlord wants to stay and pay rent for a long period of time. Given the marketplace for commercial space in the next period of time, good landlords will place good tenants into new leases at lower rates, just to keep the space filled with a good tenant. Landlords know that a lot of tenants won’t make it at all, and more will close or let leases expire in the next year or two. 

A bank makes money by working with distressed borrowers. You may never have heard the term, or been involved in the process, but banks make money by allowing borrowers to buy time to repay loans. This is accomplished through what is called a “forbearance” agreement. A typical forbearance agreement allows a borrower at the end of a loan to pay for time so that a sale or refinancing can occur. This scenario may be when a medical group buys an old building to tear down and plans to build a new building. The construction loan may be due 18 months after demolition, but any number of factors causes a delay. The loan is due and the building is still under construction. The bank will typically sell the borrower 6 months of time for a fraction of a “point” on the loan, allowing for the completion of the construction and full repayment or refinancing of the loan. The bank gets paid in full and makes a bonus for waiting. The borrower has time to complete the construction project. This same series can and does occur, routinely, with all sorts of bank loans. The bank gets paid, and paid to wait to get paid.

The important news for your business, as a new normal unfolds, is that everything is negotiable. This is a perfect time for business owners to have discussions about obligations with their important business relations. Anticipating the mindset on the other side of a business conversation will give you the power to renegotiate terms and time, allowing your business to gain ground and repay its obligations without undue suffering. 

If my firm can be of any help in coaching you for these discussions or representing you in these discussions, please feel free to write to me at