Business drowning in debt
Small business owner Harry Luther has been unable to sleep and has started to get pains in his heart as the impact of Covid-19 hits him head-on.
The married father of two has gone from earning $1500 a day, to around $50, due to the pandemic.
His business, Pik & Pay Superette in Te Rapa, Hamilton is now $40,000 in debt, and he’s urging the Government to reopen the economy and re-think its small business cashflow scheme.
‘‘I can’t sleep, I’ve been gaining weight from stress, if it [lockdown] goes on like this my future will go down for the rest of my life,’’ he said.
‘‘I rang my doctor on Monday because I have a pain in my heart.
‘‘Every day I wake up and hope there are no new cases and hope Jacinda [Ardern] doesn’t make any weird conditions into level 2.’’
One year ago, the 32-year-old reached into his savings of $100,000 after working two jobs and signed a 10-year lease on his new superette. Business was thriving, situated amongst a corporate business community, and he decided to hire two parttime employees. But then the pandemic struck New Zealand.
‘‘The Government said level 2 will mean people may still work from home... if this continues and people can still work from home I might have to close the store permanently and file bankruptcy.
‘‘I have no money left to pay my rent and my stock is expiring.
‘‘Suppliers have been contacting me daily asking for payment.
‘‘Some supplies I have stopped, but I have no money left to pay for the stock that’s expired.
‘‘On Tuesday I opened at 7.30am and at 2.30pm I had made $81.’’
Luther pays near to $4000 a month for rent, $500 a month for electricity expenses, (of which he owes an additional $1600), and has further supply and maintenance costs.
At the same time he has a $750,000 house mortgage and a wife and two children, aged 10 months and 4 years-old, to support.
The Government announced on Friday small businesses will be able to apply for interest-free and low-interest loans and borrow $10,000, plus an additional $1800 for each full-time staff member.
Firms that employ 50 staff can apply for the maximum, $100,000.
Luther can borrow $11,800 but is calling on more support to go rent-free, saying the loan from the Government isn’t enough for small businesses.
‘‘It’s good for companies who have 10 to 15 staff, they will survive for months.
‘‘But for me, I will only survive for one and a half months.’’
According to a poll conducted by Waikato Chamber of Commerce every two weeks, more Waikato businesses have had to lay off more staff in the past fortnight as they push the need for level 2.
Don Good, executive director of the Chamber, said people want the economy started now.
However, despite very limited business at level 4 and 3, just over half of respondents said they would never close their business.
‘‘It’s also reassuring to see that almost 92 per cent of people said they were coping ‘easily, no problems’, ‘fine, just’ or ‘okay, but it’s tough’ in response to a question about how they are coping with mental stress.’’
‘‘We’re a resilient bunch in the business sector in the Waikato.
‘‘Not to downplay the challenges and stresses of the situation, it is tough out there, but it’s reassuring to see people are doing okay,’’ Good said.