Small Business Owners Feel the Weight of Personal Credit Guarantees – The Wall Street Journal

This noise is tightening on the owners of restaurants, fitness centers and other small businesses in the United States who are trying to hold on until the economy fully reopens. Unlike most large businesses, the burden is often deeply personal.

Townsend Vents borrowed money from his family to open his first gourmet restaurant in Philadelphia in 2014. The cook exploited the shares in his house, erased any resemblance to the pension account, and embezzled college funds for his daughter in his business. About 1.5 million personal investment is now pending. The epidemic has closed its five bases again and again for some parts of the year.

In addition, the 53-year-old Mr. Vents holds a personal warranty on a site that is responsible for about 40 540,000 rents over five years and an additional 5,000 175,000 for a liquor license. Mr Weintz hangs on to the co-worker as he handles phone bills, tax obligations, lease payments and other expenses.

“It’s like trying to stand in the quicksand,” he said. He hopes all his restaurants will reopen this month.

Small business owners often end up with a personal guarantee to go into debt or sign a lease in which they will be responsible for making payments if the business is unable to pay.