The vise is tightening up restaurant, fitness center and other small American business owners trying to hold on until the economy fully reopens. And unlike most large companies, the burden is often very personal.
Townsend Wentz borrowed from his family to open his first fine dining restaurant in Philadelphia in 2014. The boss tapped the equity in his house, wiped out any appearance of a retirement account, and raised college funds for his daughter to go to his company. About $ 1.5 million in personal investment is now at stake. The pandemic repeatedly closed its five locations during parts of the year.
In addition, Mr. Wentz, 53, has a one-location personal warranty that makes him responsible for approximately $ 540,000 in rent payments for five years and an additional $ 175,000 for a liquor license. The guarantee weighs on Mr. Wentz as he juggles phone bills, tax liabilities, rent payments, and other expenses.
“It’s like trying to stand in quicksand,” he said. He hopes to reopen all of his restaurants this month.
Small business owners who go into debt or sign a lease often offer a personal guarantee, in which they promise to be responsible for the payments if the business is unable to pay.