6.8 C
New York
March 29, 2024
Worship Media
Business

Pattie Lovett-Reid: Let the commercial rent relief applications begin…we hope

TORONTO — The past weekend has to have a been a tough one for small businesses waiting to hear whether or not their landlord is going to apply to the federal government for the Canada Emergency Commercial Rent Assistance program (CECRA).

I’ve chatted with small business owners who believe the businesses they have worked so hard to build and establish now have their future in the hands of a landlord who could refuse to participate in the program and if they do – it is all over. Many literally don’t know what the outcome will be.

I can hear the weariness in their voices and see the anxiousness in their eyes. As time passes there are good days when owners believe that when they are permitted to reopen they will find a way to make it work. Sadly there are more days when they wonder if it will ever happen, can they take on more debt and do they even have the physical and mental stamina to want to try?

At what point do you as a small business owner change a losing game and realize enough is enough and you can’t take on more debt. For many, coming up with 25% for rent isn’t even a possibility after operating on thin margins for so long and barely staying afloat before the pandemic.

Caleigh Rykiss, founder of BOLO Inc., a luxury wellness facility in Toronto, had this to say: “It’s true for many businesses even the task of coming up with 25% of our total rent (including tax, maintenance etc) will be a challenge. At BOLO we have seen a 95+% reduction in our overall revenue and we have a very large space in a very expensive neighbourhood.

“To make this happen, we will have to find this money elsewhere – whether it be a small business loan or what have you, which is not ideal for us as a new business. The idea of taking on more debt is a very scary prospect. That being said I do think that it should, in theory, make the CECRA more palatable to the landlords who can feel better about the fact that the burden has been shared between everyone – property owner, government and tenant. Having said that, many landlords are still not biting and the program is failing small businesses, particularly in the wellness space.”

Ideally collectively federal leaders, small business owners and commercial landlords join forces to keep tenants in their space with a goal of saving jobs and supporting the economy as it regains momentum once the pandemic peak passes.

This is how it will work:

  • Today landlords can apply for CECRA, which will reduce rent by 75% for those businesses impacted by COVID-19
  • The federal loan will cover half of the rent for April, May and June, the landlord covers off 25% and the tenant is expected to pay 25%
  • The program is administered by CMHC and like other government programs you apply online on a staggered basis in an effort to avoid crashing the system
  • This program is available to a small business, non-profit, or charity that pays less than $50,000 in rent each month, that generates less than $20M in gross annual revenues and has experienced at least a 70% decline in revenue since the pandemic hit.

Bottom line: Tenants are worried and lack of communication is frustrating. According to the Canadian Federation of Independent Business, half of small businesses say they are not able to pay June rent without more assistance.

  • 22 per cent fear eviction
  • Only one in ten commercial tenants who need help qualify for CECRA and believe their landlord will participate
  • 80 per cent support relief going directly to tenants if landlords do not apply

It will be interesting to see if landlords decide to take the approach “a bird in the hand is worth two in the bush.” In other words, will they accept the loss of 25% to keep a tenant in place that had been in good standing before the pandemic or go through the hassle of evicting a current tenant in the hopes they can actually find a replacement.

Click Here to Visit Orignal Source of Article https://www.ctvnews.ca/business/pattie-lovett-reid-let-the-commercial-rent-relief-applications-begin-we-hope-1.4953049

Related posts

Trump not ready to OK TikTok deal, admits U.S. won’t get cut

CTV News

Financial stress, supply issues set stage for anxious holiday season: poll

CTV News

Taiwan asks to join trade group, says China might interfere

CTV News

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More

Privacy & Cookies Policy