Business and tax attorney Janathan Allen has a stern warning for small businesses caught in the economic downturn fueled by the coronavirus pandemic.
“If you think things are going to revert from where they were, then you won’t survive in all likelihood,” says Allen, a partner in the San Diego consultancy Allen Barron Inc. and founder of Janathan L Allen, APC. “If you don’t adapt, you won’t succeed.”
Allen has been helping business clients address several deep-rooted challenges, including finding ways to postpone rent payments.
“That’s going to be a huge issue at the end of the year because all the programs currently in place defer rent, they don’t abate it,” she says.
Navigating clients through the complex tax requirements and ramifications of the Paycheck Protection Program created in the Coronavirus Aid, Relief, and Economic Security Act is taking up more time on her docket.
The program, which authorized up to $659 billion for job retention, allows small businesses to access this funding pool to pay up to eight weeks of payroll costs, including benefits, rent, utilities and mortgage interest.
Allen believes a clear assessment of the success of the CARES Act legislation and its efforts to stimulate the economy won’t truly be realized for years, if at all, considering its swift passage and lack of guidance in the 335-page document.
“There are thousands of questions that won’t be answered until tax returns, loan programs and results of some the regulations that came out are actually settled,” she says.
Developing longer-term strategies, Allen contends, is essential for business survival in the age of COVID-19, considering the great unknowns related to government interventions, business allowances, and an eventual vaccine.
“Often times that means restructuring what they are doing,” says the Montana native who began her career in public accounting, but quickly bored of that specialization.
Allen went back to school and earned an MBA in international finance as the U.S., Canada and Mexico established the North American Free Trade Agreement, a trilateral trade block designed to spur foreign direct investment, a key development that propelled California’s role on the global stage.
Allen grew up in legal circles. Her father, a Montana judge, instilled a sense of right and wrong at an early age, a compass that greatly influenced her professional career and education. Allen also earned a doctorate in law from Southwestern University School of Law, and a Masters of Laws degree from University of San Diego.
After leaving public accounting, she moved into the private sector as tax director for biotech firm, Hybritech Inc., progressing through the ranks, from controller to chief financial officer and legal counsel at several San Diego companies before becoming a partner at Allen Barron Inc. and establishing her own law firm.
The expertise at Allen Barron extends far beyond taxes, accounting and the law.
“Our goal is to go back and solve complex problems,” says Allen, who’s helping several restaurant clients stay afloat after losing as much as 75% of their seating capacity due to social distancing requirements.
Property owners expect lease payments in full, while many small businesses and home renters don’t have the means.
“This is where the chasm between Main Street and Wall Street really comes in. There has to be some mechanism that allows them to catch up over time without causing huge economic devastation.” — Janathan Allen, a partner in the San Diego consultancy Allen Barron Inc. and founder of Janathan L Allen, APC
The international business expert and long-time author on such matters has noticed another alarming trend developing in Southern California residential real estate as foreign owners, primarily Chinese, pull money from the market and put homes up for sale.
Unlike years past, they’re not reinvesting that money back into California real estate, or elsewhere throughout the country and economy.
“We’re seeing a decline in terms of investment into the states because of a lot of policies coming out of Washington,” Allen says. “We see it virtually everywhere.”
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