The turn is narrowed down to restaurant owners, fitness centers and other small American businesses trying to hold out until the economy reopens completely. And, unlike most large companies, the burden is often deeply personal.
Townsend Wentz borrowed from his family to open his first fine dining restaurant in Philadelphia in 2014. The chef took advantage of his home equity, erased any appearance of a retirement account, and diverted college funds from his daughter in her business. There is now a personal investment of approximately $ 1.5 million. The pandemic repeatedly closed its five locations for parts of the year.
In addition, Mr. Wentz, 53, has a personal guarantee at a location that makes him responsible for about $ 540,000 in rent payments for five years and an additional $ 175,000 for a liquor license. The guarantee weighs on Mr. Wentz when he juggles phone bills, tax obligations, rent payments, and other expenses.
“It’s like trying to stand on the sand by moving,” he said. He hopes to reopen all his restaurants this month.
Small business owners who take on debt or sign a lease often end up providing a personal guarantee, in which they promise to be responsible for payments if the company cannot pay.