Smiths Falls business facing pandemic crunch as sales drop 70 per cent

On the brink of closure WonTon Crunch in Smiths Falls says the government has come calling for loan payments and may force their closure. CTV's Dylan Dyson reports

SMITHS FALLS — A small food manufacturing business in Smiths Falls says they are facing closure due to the second wave of the pandemic.

Wonton Crunch says their sales are down 70 per cent right now, and they can’t afford to make the monthly payments on their loan from the Business Development Bank of Canada (BDC).

"We dropped from an average of $40,000 in sales to between three and five thousand dollars in sales monthly right now," says owner Prim Singh. "The restaurants are about 70 per cent of our business."

Wonton Crunch has been paying off a loan of about $140,000 from the BDC since about 2015. Singh says the second wave of the pandemic is hitting small business harder, and the circumstances imposed by the BDC are not making it any easier.

"On the first wave, we were given a concession [by BDC] to pay interest only," explains Singh. "On the second wave which is actually bigger than the first wave, we don’t have the option anymore."

"It’s true that the second wave is harder than the first," says Jasmin Guénette, the Vice-President of National Affairs at the Canadian Federation of Independent Business, who backs up Singh’s claim. "In Ontario, one business in three report that they will not survive a second lockdown."

Singh says he built Wonton Crunch himself from the ground up. It’s a small operation with five employees that keeps his entire family in work. He claims his equipment and wonton design are all proprietary. On Jan. 16, 2021, it will have been three months since Singh has been unable to make a payment to the BDC, and he fears that if no accommodations can be made, he will lose his business and his family’s livelihood.

"Unless I get concession from BDC to pay interest only for a couple months again, until the pandemic has levelled off a little bit and sales go back up, the business is going to be done," says Singh.

In a statement to CTV News, the BDC declined to comment on Wonton Crunch’s specific case, but said the following:

"We know first-hand that the COVID-19 pandemic has caused extreme hardship for many small and medium-sized businesses across the country. This is why BDC has been playing an active role in the federal government’s Business Credit Availability Program and has provided other special support for entrepreneurs that is complementary to private sector activities. This support includes enhanced working capital loans, greater repayment flexibility and additional venture capital investments."

Guénette says it is important for institutions like the BDC to accommodate these small business requests, "It’s important that they show flexibility and understanding in making their payment arrangements with businesses so that they can not only remain open, but can thrive once again after the pandemic is behind us."

With payments looming for Singh, he fears it is too late for him, and his life’s work could be taken away. "The business is worth a lot more than we owe BDC, but if BDC comes and takes it, we lose everything."