How local governments should respond to the small business crisis — with Basel Musharbash

The COVID-19 crisis has been a disaster for small businesses across the country. In this episode, Kevin speaks with Basel Musharbash about why an aggressive local government response to the small business crisis is essential—and what legal strategies cities and towns should be using immediately to help them survive and eventually recover.

In this episode we discuss the key takeaways from Basel’s recent blog post: Directing Capital to Small Businesses Affected by COVID-19: Legal Strategies for Texas Local Governments.

In it, Basel outlines three specific strategies that local governments can use to leverage public, private, and philanthropic resources toward liquidity for small business:

1. Using Chapter 380 authority to establish emergency loan or grant programs funded by public and private capital;
2. Using procurement authority to purchase goods and services from businesses using “time warrants,” which can be sold to local banks or factors for liquidity; and
3. Using Chapter 380 authority to seed “public purpose” investment funds combining public, private, and civic capital to enhance the availability of debt and equity financing for local business.

Disclaimer from Basel: Please note that the Texas constitutional requirements for the issuance of city and county debt apply to time warrants, even though those requirements are not addressed in the podcast. Local officials should always consult their city attorney or bond counsel prior to issuing debt.

ALSO: It wasn't mentioned in the show, but Basel compiled a terrific resource for local governments—The Manual of Aid to State and Local Governments Under the CARES Act. It’s a comprehensive guide to the coronavirus relief bill for states and localities.

Basel Musharbash is an attorney with the Patel Law Group. His practice focuses on real estate, corporate, and community development matters. He also writes about lawyering for sustainable, integrated, and democratic communities on his blog, Lawyering For The Town. You can follow Basel on LinkedIn.

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(The music in this episode is from No Money, Custodian of Records, & Isaac Horwedel.)

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