What happens when small businesses can’t pay the rent

Small businesses across the United States are finding it difficult — if not impossible — to make their monthly rent payments.

The economic shutdowns and on-again-off-again re-openings have made it hard for business owners to cover their rent, which can sometimes be their largest expense.

That has created an uncomfortable tension and interdependency with the often small, independent landlords or small real estate firms from which they rent. Those landlords, after all, have their own expenses and taxes to pay.

Andy Sommer, who owns a lifestyle boutique store called Forth and Nomad in a high-end Houston shopping district, is one year into a 10-year lease, which costs him $16,000 a month. Sommer said he has a good relationship with his landlord, who has told him to pay what he can for now and they’d figure out how to make up the difference later. But, in April and May, he couldn’t afford to pay anything.

Sommerwas able to pay three-quarters of his rent for June and July — thanks tomoney from his Paycheck Protection Program loan and some revenue from his store’s online site. Going forward, though, he doesn’t know how much he’ll be able to pay,especiallygiven that Houston may soon reimpose stay-at-home orders.

With so much beyond his control, he, like a lot of small business owners, wonders how much he should have to pony up. “Should we be responsible for rent when we’re forced to close by the government? Should it be on us or on the landlord? It’s nobody’s fault but whose responsibility is it?

Aleta Williams, a chef who founded her owncatering company in Chicago called Loquacious Culinary Events, only pays $700 a month to sublet a commercial kitchen she shares with the lease holder and can write off a portion of her residential rent, since she uses part of her home for her business. But given that bookings at her catering company — which relies on large gatherings — have mostly dried up, she’s been having troubleeven affording that amount.

Read more: edition