Lockdown means no revenue for many local businesses and some are facing a fight for survival.Cash-starved sectors include tourism-related and hospitality businesses, retail and most of the service economy. With more than one third of Bermuda’s 35,000-strong workforce employed in jobs that cannot be done remotely, layoffs will number in the thousands, as the “shelter in place” and social distancing measures to fight against the spread of Covid-19 take a severe economic toll.The Royal Gazette gauged the thoughts of several members of the business community on the impact of the ongoing crisis. While support for the lockdown was unanimous, it was clear that the unprecedented shutdown of the economy was causing businesses pain amid great uncertainty over the future.Erica Smith, executive director of the Bermuda Economic Development Corporation, which works with start-ups and small and medium-sized enterprises, said the BEDC had been “inundated with requests for help and advice”.“We put out a press release on March 20 about what we were preparing to try to help and the week after that we had 100 requests for support services, the vast majority with respect to financing,” she said.Dealing with overheads, in particular rent, payroll, insurance and tax, when no revenue was coming in, was the main challenge for most small businesses, she said. The BEDC responded to the crisis by reallocating funds from its operating to its capital budget to bolster resources available for providing microloans and bank loan guarantees to struggling firms. Individual microloan limits have risen from $20,000 to $30,000, while the BEDC raised its loan guarantees from 55 per cent to 75 per cent, reduced its interest rates, extended loan terms from 24 months to 42 months, introduced interest-only periods for existing and new borrowers, waived its credit-check fees and slashed other fees in half.“We tried to delay repayment terms to give our clients as much breathing space as possible, so what little cash they have they can retain and tread water, and stay alive through to post Covid-19,” Ms Smith said. “Quite frankly, we don’t know how long that’s going to be and neither does the rest of the world. Businesses are feeling very stressed in this unknown world and we’re just trying to help as best we can.”She added that the BEDC expected “hundreds” more requests for help from businesses before the crisis was over. The organisation shifted $350,000 from its operating budget to boost it loan capacity to $2 million. Ms Smith said there was still about $500,000 available for direct lending, but much more financing capacity in the form of bank loans guaranteed by the BEDC. Rent is a particular challenge for cash-strapped small business tenants, she said.“We have found some landlords who’ve been very understanding and have worked miracles with their tenants and said they’ll defer the rent,” Ms Smith said.“Unfortunately there are others who want to stick to the terms of the rent and service provisions as if we were pre-Covid-19.”She called on commercial landlords — some of whom are benefiting from the banks’ deferral of mortgage payments — to work with their tenants to find realistic solutions. Looking ahead, Ms Smith was optimistic for the future of entrepreneurialism in Bermuda, given the degree of ingenuity and innovation she was seeing during the crisis, as businesses adapted to survive.Dennis Fagundo, president of the Chamber of Commerce and managing director of D&J Construction, said many businesses were facing a “massive liquidity crisis” because of the sudden loss of revenue. “If one makes the assumption that this is temporary, then how long temporary is has a direct impact on how much you burn through your cash reserves — if you have any — and on finding liquidity for the short term, such as an overdraft, so when we’re through to the other side of this, then businesses are able to start operating again,” Mr Fagundo said.The Chamber supports the steps the Government has taken, both in terms of health and the economy, he added. “The very quick action in providing the unemployment benefit was a critical step in preventing what could easily have been a social disaster with so many people not working so quickly and so unpredictably. It could have been much, much worse,” Mr Fagundo said.“There are ongoing discussions and the Government is well aware of the need to get the economy moving quickly again to reduce the amount of damage that’s done, and through that to protect employment and economic activity, the engine that drives the island.” David Burt, the Premier, last night revealed that Curtis Dickinson, the finance minister, had been in talks with Mr Fagundo yesterday about support measures for the economy.“The critical thing now is that people obey the rules and stay at home,” Mr Fagundo said. “The better behaved the public are, the faster we get out the other side and the faster the economy can start recovering. “If this gets extended because of people’s bad behaviour, then that will be very bad for everybody.” Mr Fagundo’s own industry, construction, is one of those in shutdown mode. He said that those working on larger projects on the basis of work put in place, will be able to get the revenue flowing in again quickly after restrictions are lifted. For smaller contractors reliant on customers calling up to make property repairs, for example, bouncing back may prove more difficult, he said.John Wight, group chairman and chief executive officer of BF&M Ltd, said many financially-stretched clients had already reached out to the insurer. “Not surprisingly, the most impacted seem to be hospitality and retail clients,” Mr Wight said, adding that he expected other sectors to experience similar stresses in the coming weeks. “I’ve been contacted by clients in both of those industries, who say the stresses on their businesses are making it difficult for them to make timely payments to BF&M, for health insurance premiums, pension contributions or property insurance premiums,” Mr Wight said.“Our staff have been communicating with clients to help them find a way through this period, notwithstanding that nobody knows for sure how impactful this will be for Bermuda or how long this period will go on for.” Customers have asked to pay annual premium payments in instalments and also requested cheaper health insurance packages for their employees.“I think that everyone wants to do the best by their staff, but the commercial reality is they have to be able to work out alternatives to sustain their operations through this difficult period,” Mr Wight said.“Several companies have advised us that they have no alternative but to lay people off for a time, but they don’t want their employees to go without health insurance.” Most had “taken the very responsible position of ensuring coverage for their staff”, he added.All of BF&M’s approximately 150 employees have been working from home since before the lockdown. Phone calls to the company had fallen about 40 per cent, he said, while customers were doing more business online. Mr Wight gave “full marks to the Government in how they’ve reacted to this crisis” and said it would be premature to talk about what further measures could be taken to help businesses survive.Philip Barnett, president of Island Restaurant Group, spelled out the especially tough situation his industry was facing. “Our businesses have been shuttered with no income and it’s an incredibly scary time,” said Mr Barnett, whose group operates eateries including the Hog Penny, the Pickled Onion, Barracuda Grill, the Frog and Onion Pub and Brew.Restaurants had “razor-thin margins”, he said. It was a cash-intensive business, with at least one third of cashflow going to pay staff, with other major outlays to pay suppliers and creditors. “Our average profit in the industry a couple of years ago was about 2.2 per cent: so about $2 of every $100 is profit, if you have good year,” Mr Barnett said.“Now we have no revenue coming in, yet many of the associated costs still exist. Many of us still have the fridges and freezers on to prevent the stock we have from spoiling.“Many of our landlords have been very understanding and have given us relief, deferral or discount, but the reality is that there’s still a liability there that restaurants are contractually required to pay. “The ability to plan is curtailed because nobody understands what tomorrow’s going to bring.”Hospitality industry representatives met with the Premier about two weeks ago, he added, to discuss measures that could help the stricken industry. “We’re certainly hopeful that the Cabinet are looking at that. But if we project two or three months from now, our needs would go to significantly more than that: by then there won’t be any liquidity or cashflow within restaurants to reopen, so the fear would be that there will be mass closures.”A 15-day extension for first-quarter payroll tax payment to the end of the month was helpful, but he said many restaurants, who had gone without revenue for about a month, would not have the cash to pay it and so would need further payroll tax relief. Through the winter, restaurants traditionally do renovations and capital spending. In addition, many would also have outlaid more cash on supplies for the upcoming busy season, so now was perhaps the worst time of year to suffer a cashflow squeeze, he said.Mr Barnett said the best thing the public could do for now was to stay at home and help Bermuda get through the crisis. Looking to when restrictions are lifted, he urged residents to “save up all the celebrations you’ve missed” and to come out as often as possible to help local restaurants recover.He said he’d had to lay off many of the staff at IRG, but was grateful to the Government for its unemployment benefits scheme. “It’s a tough time for all employees, through no fault of their own,” he said. “Many restaurants have probably laid off over 90 per cent of their staff.” Retail, which employs more than 3,000 people on the island, is another hard-hit sector.Paula Clarke, chief executive officer of Gibbons Company, said: “There’s only so long we can survive without any income and that’s our biggest concern.She added: “We have not laid off any permanent employees. That’s something we look at on an ongoing basis.” The company employs more than 80 staff. Employees were in their third week of working remotely, Ms Clarke said, and before the “shelter in place” order, the emphasis had turned to online shopping and the launch of Gibbons’ upgraded website had been brought forward from June.“But online shopping is a very small portion of the business and we could never run the business purely online,” she said.Ms Clarke added: “What is frustrating to us is that shipping companies are being allowed to operate while we’ve had to close down. In effect, what they’re doing is encouraging people, when they have this much time at home, to shop overseas. “With so many people being laid off, there’s only a limited amount of money to go around. And for shipping companies to be allowed to offer free shipping while the rest of the country is on lockdown goes against the grain of pitching in and helping each other, which the Premier has promoted. It doesn’t help Bermuda recover.”The message of supporting local businesses to help the island recover was more important now than ever, she said. She added that the Government had made “all the right moves” in its handling of the health crisis. The overall impact of Covid-19 on Bermuda’s business community remains a matter for conjecture.BF&M’s Mr Wight said: “As we all know, there were many businesses that were under stress before this pandemic and the crisis will add further stress to those businesses. “The big question mark for Bermuda would be: how long does this go on for? And how severe will the impact be on those businesses? I don’t think anyone can answer those questions right now.”