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Small Business Issues During COVID Pandemic

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What financial help is available for small business owners?

The State of Iowa has grants available for small business owners (different programs depending on the size of the business).  We encourage you to apply as soon as possible, as deadlines are coming quickly and there is likely to be a large demand for these grants.  There is also some relief via tax deferments.  You can find more information here:

The Federal Government makes loans available for small business owners available through the Small Business Administration.  You can find more information available here:  If you are interested in one of these loans, apply as soon as possible -- we anticipate a large demand for these loans and there may be a wait to receive them.

This situation is quickly changing, and we encourage you to check back with the Iowa Economic Development Agency often.  You should also be careful to document losses you experience due to Covid-19 and any extra expenses you have had to incur (for example, expenses for employees to work remotely).  These records may be helpful for tax incentives or other financial packages that are made available in the future. 

What should I do if I can’t pay my commercial lease/commercial landlord?

We strongly encourage commercial tenants to try to work out a short rent abatement or forbearance with their landlords.  We have heard of some landlords allowing tenants to tack a month of rent on to the end of the lease term (interest free) or allowing tenants to use a security deposit to cover rent.  These agreements benefit both parties.

It is unclear whether commercial tenants fall under the protection of Governor Reynolds’ eviction moratorium.  Moreover, many commercial leases have contractual “liens” that purport to give landlords the ability to lock commercial tenants out of the premises, seize the inventory or items inside the premises, and then terminate the lease and sue for the balance owed under the contract.  It is Iowa Legal Aid’s position that all tenants are owed certain due process protections (such as notice and hearing).  Nevertheless, many landlords do not do this and commercial tenants should be aware that this could happen.  Each lease is different and the facts of your case will change the answer.  Contact Iowa Legal Aid if you want help reviewing the terms of your lease.

If I can reach an agreement with my commercial landlord, what terms should be included?

Do commit your agreement to a signed writing including the basic terms agreed on (amount abated, when it’s due). Don’t rely on good faith or memory of parties.  Getting agreements in writing helps make sure that both parties are on the same page and avoids headaches down the road.

Do consider things like due date and ability to prepay before the due date, for example.

Do state that you are not waiving any rights or remedies you would otherwise have under the lease.

Do put in a provision allowing the agreement to be signed in separate parts and electronically. Contact Iowa Legal Aid if you want help drafting a rent abatement or forbearance agreement.

What should I do if I cannot fulfill orders or contracts?

The first step is to review your contract.  Many contracts include terms that excuse a party from performing when there are things that happen outside of that party’s control.  These are sometimes called “act of God” terms.  You will have to look at your contract and see what it says. 

If you don’t have a contract or your contract doesn’t address the situation, you’re not totally out of luck.  Common law does allow a contract to be terminated if the contract will be impossible or impractical to perform.  Depending on the specific facts of your situation, this may apply to you.  You may still have liability, though.  Iowa Legal Aid may be able to help you figure out how to best manage your risk if you cannot fulfill a contract. 

If someone at my business has or is suspected of having Covid-19, must I tell my employees or customers?

This is a very tricky question and the answer will depend on the specific facts of your case.  You should definitely speak with an attorney about this before you do anything.  Various laws protect private health information and prohibit discrimination.  This type of inquiry or dissemination of information is hard to navigate, especially in a small workplace where folks are connected on social media.  You never want someone to feel discriminated against based on how they are spoken about, nor do you want someone to feel like their private health information is not being respected.  The Iowa Department of Public Health may be able to give you some guidance, too.    

We strongly encourage people to make a plan about what you will do if you find yourself in this position.  Ideally, this would be a conversation you have with the affected employee.

Will my business insurance cover my losses due to Covid-19?

It depends.  Insurance policies are contracts and the answer will depend on what the policy says.  We have seen a lot of stories about coverage being denied.  That said, this situation is rapidly changing, each policy is different, and the facts of your case will change the answer.  We encourage everyone to compile their policies and review them carefully.  Iowa Legal Aid may be able to help you review your insurance policy. 

The uncertainty surrounding Covid-19 and its impact on my business is having a negative impact on my mental health.  Can anyone help me?

This is an overwhelming and uncertain time for most Americans.  There are many folks who want to help small business owners at this time.  Here are some resources you should know about:

  1. The National Alliance on Mental Illness has a Covid-19 (Coronavirus) Information and Resources page.  There are links to various resources and helplines for people who find themselves in crisis.
  2. The Iowa Small Business Development Center has a resource page here:
  3. Greater DSM Partnership put on a webinar called “Top 5 Ways to Survive and Thrive During Economic Uncertainty,” available on their website at
  4. The Iowa Center for Economic Success is working hard to put out webinars and trainings for small business owners at this time.  They also have a Covid-19 resource page.


Iowa Legal Aid Provides Legal Help to Low-Income Iowans

To apply for help from Iowa Legal Aid:call 800-532-1275.

  • Iowans age 60 and over, call 800-992-8161 or apply online at
  • If Iowa Legal Aid cannot help, look for an attorney on “Find A Lawyer” on the Iowa State Bar Association website A private attorney there can talk with you for a fee of $25 for 30 minutes of legal advice.
  • As of March 18, 2020, our offices are closed for walk-ins until further notice, due to the coronavirus outbreak.


*As you read this information, remember this article is not a substitute for legal advice.

Last Review and Update: Apr 16, 2021
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