‘Far from normal’: Small businesses still struggle to pay rent as Texas reopens

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AUSTIN (KXAN) — It’s normally “busy season” at home staging company Sought + Found.

Their 11,000-square foot warehouse space is still full of fabrics and furniture, ready to make houses on the market feel like home. But Master Stager Richard Kline said they’ve lost 80% of their business due to the coronavirus pandemic.

“It’s just been devastating,” he said.

He said many buyers and sellers are postponing their move or choosing to house-hunt online, so there hasn’t been much demand for home staging. They got a Paycheck Protection Program loan and disaster loan from the government, but Kline said that was only enough to “keep payroll going.”

The federal government recently changed requirements for the PPP loan program. To remain eligible for load forgiveness, businesses now must only put 60% of their PPP loan towards payroll costs, as opposed to the previously required 75%.

Still, for the Sought + Found team, the real issue has been finding the money for rent.

“If we pay them full rent, we will be out of money in three months,” Kline said. So for now, they’ve been paying what they can.

At first, they said their landlord was working with them, but now they are feeling the pressure to get “back to normal,” and start paying back what they owe from the last three months.

“We don’t know what normal is. We don’t know when normal is ever going to come,” Kline emphasized, especially in the real estate industry.

Plus, Austin Attorney David King told KXAN, they’ve been seeing conversations annd negotiations like this happen more and more with landlords and tenants.

“Luckily, we are seeing the parties try to work together, I think,” King said. “You come up with a short-term plan. You reach an agreement where you decide, ‘Here’s what we are going to do for three months, and then we’ll see.'”

He added that the pandemic has been difficult on landlords, too.

“If they lose a business, if a business moves out, it’s not clear they will be able to fill that space,” King said.

This week, Travis County extended their ban on “notices to vacate” until July 25, which slows down any eviction proceedings.

Right now, for many commercial landlords and tenants, coming to an agreement is the only option.

King said most city and state rental assistance programs are exclusive to residential renters, but there’s been a demand for more help on the commercial side.

While the warehouse isn’t their home, Kline and his team said it’s very close. It’s their livelihood, and they wish their were more programs aimed at rental assistance for small businesses like theirs.

“It seems that that the federal government has forgotten about the problems that the economy is still facing,” he said. “People want to believe that it’s over, and that everything is opening back up and everything is going back to normal. It’s far from normal.”

They said they understand what’s required of them under the years-long lease they signed, but for the foreseeable future, Kline called it “an impossible situation.”

“It’s not like all the business that we lost during the during the the bad times — the really bad times of the pandemic — we’re just going to suddenly get back, you know? I mean, that’s just not the way business works.”

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