Owners of restaurants, fitness centers, and other small American businesses that are trying to hold on until the economy is fully functioning are stepping up the vise. Unlike most large companies, burdens are usually deep personal responsibilities.
Townsend Wentz opened his first Philadelphia gourmet restaurant in 2014 with money borrowed from his family. The chef used the assets in his home to erase the appearance of his retirement account and embezzled his daughter’s college funds for business. There are now approximately $1.5 million in personal investment in the balance. The pandemic closed his five locations several times at certain times of the year.
Most importantly, Mr. Wentz, 53, has a personal guarantee in a location, which makes him responsible for paying about $540,000 in rent over five years and an additional $1
He said: “It’s like trying to stand in quicksand.” He hopes that all restaurants will reopen this month.
Small business owners who assume debts or sign leases usually provide personal guarantees, and if the business is unable to pay, they promise to be responsible for these payments.