TORONTO -- A survey of hundreds of small businesses across the city has found that nearly two-thirds of them may have to close down for good within three months as they struggle to keep up with rent and other bills during the COVID-19 pandemic.
The survey, which was developed by the Broadview-Danforth Business Improvement Area (BIA), involved 561 small businesses. and 137 landlords.
It found that 17 per cent of businesses believe that they can only last for another month given their “current/expected revenue” while 21 per cent said that they could make it another two months and 23 per cent said that they could last for three months. Only about nine per cent of businesses said that they would survive regardless of how long orders forcing their closure remained in effect.
The survey also found that many businesses have already fallen behind on rent payments and are likely to continue on that track.
Only half of the businesses surveyed said that they were able to pay their full rent in April with nearly one-third of them (29 per cent) saying they couldn’t pay any rent at all and a further 11 per cent saying that they could only pay about half of their rent. The remaining respondents said that they could either pay a quarter of their rent (6 per cent) or three-quarters (4 per cent)
With May rent due next week, the businesses were also asked about how much they anticipated being able to pay their landlords and the results are alarming.
Nearly four of ten businesses (38 per cent) said that they wouldn’t be able to pay any rent while 19 per cent said that they would only be able to pay about half of their rent and 10 per cent said that they could probably only pay a quarter of their rent. The percentage of businesses that felt they could pay their entire rent bill, meanwhile, was 28 per cent.
The businesses were also surveyed about what programs they felt would be of the biggest assistance to them in surviving the pandemic.
Nearly 85 per cent of them said that a rent relief or bailout program would be helpful.
The percentage of businesses that said that the federal government’s wage subsidy program was either strongly or somewhat helpful, meanwhile, was just 31 per cent.
Speaking with CP24 on Tuesday, Mayor John Tory said that he wasn’t surprised by the results of the survey but he pointed out that there are numerous programs in place to help businesses stay afloat over the next few months.
“I don’t think it is any accident that the time period they are talking about also happens to be the time period chosen by the governments for the relief programs, the individual relief programs and the wage subsidy programs and so on,” he said. “I think what we have to do is hope that through maintaining physical distancing and staying home and doing what we have to do that those numbers (of cases) will keep going down and that we will be in a situation where we can start to reopen the city. You will recall that our medical officer of health said when we announced the restrictions on bars and restaurants that it would be sort of a 12-week program to get where we needed to be and we are about six weeks into that now and some of the trends are starting to show the right things.”
Nearly three-quarters of landlords didn’t get full April rent.
The Broadview-Danforth Business Improvement Area also spoke with 137 different landlords as part of the survey.
They found that 74 per cent of them didn’t receive all of their April rent, including 29 per cent who didn’t receive any rent at all.
The percentage of landlords who don’t expect to receive the entirety of their May rent, meanwhile, is 82 per cent. That includes 28 per cent of landlords who don’t expect to receive any money whatsoever.
About one-third of landlords said that they don’t have a mortgage. Of the ones that did, 34 per cent said that they wouldn’t qualify for a mortgage deferral while 18 per cent said that they had not inquired. The remaining 17 per cent said that they would qualify.
The businesses surveyed were located in 54 different business improvement areas across the city.
About 45 per cent of them were service businesses while 21 per cent were bars or restaurants and the remaining 34 per cent were retail stores.