COVID-19 has severely impacted the hospitality and restaurant industries – with smaller, more entrepreneurial ventures being hit the hardest.

A report released by Dalhousie University shares that tnhe Canadian hospitality industry could lose up to $20 billion in revenue next year.

This is because, in addition to a global pandemic, people’s habits have changed too. Many Canadians are working from home and making food at home – this has reduced restaurant visits and deliveries.

As a restaurant owner, you’re probably relying heavily on deliveries and online ordering at this point. Even though most Canadian provinces are now in later stages of reopening, if your restaurant is open, you might still not be operating at maximum capacity to meet the physical distancing guidelines.

Winter also adds another layer of complexity to your operations.

When it comes to financing for your restaurant, you may have managed to keep things going through savings or additional loans. For instance, many small businesses have received the $40,000 interest-free small business loan from the government which has to be repaid on or before December 31, 2022.

If you’re still struggling to stay in business, trying to think of what you can do to survive, or are worried about restaurant equipment financing – financial restructuring may be the answer.

Decreasing debt payments and reducing the overall debt and interest are some things you can take into consideration to find relief. As creditors are a lot more flexible, when it comes to negotiations, then they were Pre-COVID-19, this is a good time to consider debt management options.

Though, if the situation is difficult at the moment or you don’t see the demand for your food business recovering, you might be thinking of closing down your business.

If that’s the case, financial restructuring is an even bigger consideration because you will need to find ways to protect your assets, gauge which debts in the business carry personal liability, and create a plan to deal with the debts of today and tomorrow.

Should you just opt for bankruptcy?

Bankruptcy may not be a very easy way out. It can be expensive and can have personal implications if the debt carries director’s liability – such as unpaid source deductions and GST/HST liabilities.

Another issue with bankruptcies is that the trustee involved does not represent you. They are impartial court appointed officers, who have to look out for both your and your creditors’ interests. While you can call them for help, they do not actually represent you.

This is where debt consultants, like DebtCare, come in.

We represent you. We look at your business’s financial information and come up with scenarios to help you assess the impact of different forms of financial restructuring on your business.

While working with a debt consultant, you are free to ask questions and these won’t impact your case – unlike with a trustee who will add your answers to the record. Once information is shared, you can’t retract it.

There are options other than insolvency and there is support for you.

If you are stressed about the financing for your restaurant, you can reach out to us for a free consultation and guidance. Call us on 1-888-890-0888 or visit www.debtcare.ca.