Small business owners have expressed concern over the futures of their establishments, wondering what will happen once the deferment of their rent and loan payments end.
The bread and butter of the bar industry and the event planning industry are social gatherings. Since March, many of these businesses began closing up shop because of the COVID-19 pandemic.
It’s been two months and although lending institutions have offered some relief in the form of deferment of payments and fees, these business owners believe it is not enough because the expenses are still piling up.
The problem with the relief is that when the deferment ends, business owners will not only be on the hook to pay the current rent or loan bill but the three months in arrears, says bar owner Thomas Peinhopf. He owns the Shady Lady and Livehouse, both of which remain closed today. He believes that small business owners need to be safe and secure from eviction and penalties after the emergency stops.
“We still have to pay the rents. Rents are not disappearing. Nobody is going to just let you or give you a month of free rent. So it has to be paid off. It needs to be done in a way that either we are given the chance to catch up on our own terms with our own timelines without pressure and without penalties and late fees or it needs to be taken care of by the government,” Peinhopf said.
Another alternative is to add the three months arrears to the tail end of the loan period or rental contract. The Occasion owner Kat Benavente agrees that these alternatives would be of greater assistance to business owners. Like many other entrepreneurs, the financial instability brings fear of having to close business for good — a reality she believes she is facing.
“I’m just wondering how that’s going to affect me or other business owners who do have what we call business or commercial loans that are not SBA-guaranteed. We had to use our personal assets. How is that going to affect our own personal families now? We had no control over this. Are they going to take away my family car are they going to take our home? Are they going to take my husband’s income, now? So these are the things that are going through my head on a daily basis,” Benavente said.
She, too, questions how the government is going to help the small business owner recover after the emergency declaration is lifted.
Although the future appears bleak, Congressman Michael San Nicolas told PNC that he understands that businesses directly or indirectly involved with crowd revenue are struggling but there is help coming in the form of the Heroes Act HR 6800.
“We included language waiving the 75%/25% payroll requirement for PPP loan forgiveness, allowing for more proceeds to be used for rents and utilities, and we extended the timeline to utilize funds in the program from 8 weeks to the end of 2020, to more accurately meet reopening schedules,” the congressman said.
San Nicolas says GovGuam stands to receive over $2.4 billion from the HEROES Act if it is approved. The bill is currently in the U.S. Senate.