Mounting bills could mean a wave of restaurant closures this summer
More than anything, rent threatens restaurants in coronavirus-hit areas of the country
Many restaurant owners who’ve been forced to close their businesses because of the coronavirus pandemic wonder if they’ll be able to hold out long enough to re-open.
Bills are mounting and many worry they won’t be able to pay up even with support through the federal government’s massive $2 trillion stimulus package, according to Bloomberg. That could mean a wave of closures this summer.
The fate of most restaurant owners is in the hands of their landlords. Some are working with their tenants, while others are putting their feet to the fire.
‘Helbraun & Levey LLP partner Lee Jacobs said most landlords are accommodating, but larger institutional landlords with enough cash to hold out “can outlive having empty retail space.”
Some landlords are letting tenants dip into their security deposits to make rent. Others are creating repayment plans so restaurants can pay back missed months gradually once they reopen.
The federal stimulus package sets aside $350 billion for small business loans, but business owners have to be careful about how they use any money they get through the program. If they use anything less than 75 percent of their loan to make payroll, they’ll have to pay that money back, according to Bloomberg.
Some restaurateurs want the federal government to offer more protection going forward, like waiving repayment deadlines.
“Otherwise, businesses fail, landlords fail, banks are left holding the bag,” restaurant owner Yann de Rochefort said. “Good luck putting that all back together.” [Bloomberg] – Dennis Lynch