Five years after the COVID-19 pandemic reshaped the economy, microentrepreneurs continue to face persistent and evolving challenges. From rising rents and debt to immigration enforcement and digital risks, many small business owners are focused on survival rather than long-term growth. Drawing on direct client work across New York City, the authors identify key trends shaping the realities microentrepreneurs face and highlight ways lawyers and advocates can offer meaningful support.

One major shift has been the declining accessibility of physical storefronts. Commercial rents have continued to rise while foot traffic remains uneven, pushing many microbusinesses toward e-commerce. While online platforms offer lower overhead and broader reach, they also bring legal considerations related to consumer protection, data privacy, accessibility, and platform terms. Lawyers increasingly help clients navigate lease negotiations, flexible occupancy arrangements, and compliance in hybrid or online business models.

Debt remains a growing concern. Small business loan defaults, particularly through SBA programs, have increased due to higher interest rates and pandemic-era lending changes. Many entrepreneurs are still struggling to repay COVID-related Economic Injury Disaster Loans and now face aggressive collection efforts. Limited public guidance leaves many borrowers uncertain about options such as loan workouts or bankruptcy, especially immigrant entrepreneurs facing additional barriers to federally backed financing.

Tariffs have further strained microbusinesses by raising the cost of imported goods and materials. Many small business owners report delaying growth, postponing hiring, or raising prices to stay afloat. These conditions underscore the importance of clear contract terms that allocate cost risks and address supply chain disruptions.

Immigration enforcement policies continue to affect workforce stability, particularly in industries reliant on immigrant labor. Fear of enforcement has contributed to labor shortages, higher turnover, and rising operating costs. Legal support can help immigrant entrepreneurs formalize their businesses, comply with employment and tax obligations, and access trusted community-based resources.

Technology plays an increasingly central role in microbusiness operations. Social media is often the primary sales and marketing channel, bringing risks related to advertising disclosures, data privacy, and accessibility. The growing use of artificial intelligence tools can boost efficiency, but also poses risks when AI-generated materials are used without legal review.

Microentrepreneurs are also increasingly registering businesses across state lines, which can create unexpected tax and compliance obligations. At the same time, cybersecurity and intellectual property concerns leave many small businesses vulnerable due to limited resources.

Supporting microentrepreneurs requires practical, client-centered legal guidance that reflects their day-to-day realities. By helping clients understand their rights, manage risk, and prioritize limited resources, lawyers can empower microentrepreneurs to build stability and contribute to their communities within the bounds of the law.

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This post is adapted from an article co-authored by Andrea Tan, Supervising Attorney in the Community Development Project at The Legal Aid Society; Nadine Mompremier of Simpson Thacher & Bartlett LLP; and Nicholas Aquino of Volunteers of Legal Service (VOLS). The original article was published in PLI Current: The Journal of PLI Press, Vol. 9.