The federal government is putting up cash to help small businesses pay their commercial leases through the COVID-19 crisis, but North Vancouver experts question how many local entrepreneurs will actually be eligible.
The program announced last week would see the government provide forgivable loans up to 50 per cent of a small business’ rent if the landlord agrees to forego 25 per cent and if the tenant can scrape together 25 per cent.
“After labour, (rent) is the biggest expense that businesses have out there and there's been a lot of uncertainty over the last month as to whether or not there was going to be support,” said Patrick Stafford-Smith, North Van Chamber CEO. “It is definitely the No. 1 issue.”
The program is only available to businesses whose landlords are still paying mortgages on the property, and because it requires the tenant and landlord both wanting to play ball, it will be a test of some business relationships, Stafford-Smith said
The money goes right to the mortgage holder, not the landlord.
“So the people who are motivated to get to these funds are not the ones who have to apply for it. That's probably the biggest disconnect,” he said.
The government has been announcing sweeping aid programs almost daily, so Stafford Smith said he expects some gaps to be present in the system.
“We're hoping that with scrutiny, we can get some very quick turnaround in terms of addressing the gaps,” he said. “I'll call this a very good first draft.”
Farhad Khan, owner of Maa Yoga in the Dollarton Plaza, has been doing what he can to sell products and gift cards while classes are cancelled. He’s now welcoming the program.
“I'm relieved. Would it be better if it was full rent? Obviously,” he said. “Now, it's just a matter of getting in touch with the landlord and seeing how this is all going to be executed properly.”
Khan is already looking ahead to the future and warning many of the same businesses struggling to hang on now can expect a hard landing when the economy reopens. Even the rosiest projections foresee a long period of limiting the number of people who will be allowed inside at any time, Khan noted.
“I'm going to have less people coming to my studio just because people are afraid but also we want to keep social distancing, as well,” he said. “I just want to make sure that there's some type of plan in place for when we do open knowing that it's going to be a transition getting back to where we were.”
