Mar 19, 2020 - Economy & Business

Small business' rent problem amid coronavirus crisis

Illustration: Aïda Amer/Axios

Small businesses can lay off or furlough employees if they are forced to close for the duration of a lockdown. They can stop buying goods from vendors. They can even stop paying their owners. But they still owe rent.

The big picture: If no money is coming in, then most businesses won't write those rent checks. Some will simply fall behind; others will take advantage of formal rent moratoriums. Either way, the problem just gets kicked down the road, creating a nasty past-due rent liability.

What to watch: France has announced that it will suspend rent and utility bills for small businesses. So far, that doesn't seem to be something the White House is considering.

  • Few if any U.S. landlords will be willing or able to start eviction proceedings in the midst of the crisis. But once businesses start to reopen, nearly all of them will try to collect on back rent.
  • In the case of small businesses paying below-market rents on a long-term lease, the landlord could get quite aggressive.

The bottom line: At some point, the U.S. government will have to step in to adjudicate these disputes. It might even have to pay some of the back rent itself. Or, it could follow hedge fund manager Bill Ackman's advice and just give everybody in the country a 30-day rent holiday.

Go deeper: The investor's guide to coronavirus

Go deeper

U.S. coronavirus updates: Death toll passes 9,600

Data: The Center for Systems Science and Engineering at Johns Hopkins; Map: Andrew Witherspoon/Axios

Recorded deaths from the novel coronavirus surpassed 9,600 in the U.S. Sunday night, per Johns Hopkins data. The death toll in the U.S. has risen over 1,000 every day since April 1.

Why it matters: U.S. Surgeon General Jerome Adams said on Sunday this upcoming week will be "the hardest and saddest week of most Americans' lives" — calling it our "our Pearl Harbor, our 9/11 moment."

Go deeperArrowUpdated 29 mins ago - Health

Biden says he'll follow CDC mask guidance: "Listen to the Faucis of the world"

Joe Biden said on ABC's "This Week" Sunday that he will follow the Centers for Disease Control and Prevention's new recommendation that people wear face coverings when they leave home to prevent the spread of the coronavirus.

Why it matters: After the White House announced the guideline last week, President Trump said he will likely not wear a mask and emphasized that the guidance was "voluntary."

Virus vices take a toll on Americans

Illustration: Sarah Grillo/Axios

Americans are doubling down on their worst habits to cope with the mental and emotional stress of the coronavirus pandemic.

Why it matters: The pandemic will have a long-lasting impact on the health of the American people, in part due to the habits they'll pick up during the weeks and months they're forced to stay home.

Go deeperArrow20 hours ago - Health