Bridging the Gap by SeedIn Ep. 3

ft. Cafe Project (Outbar)

“The government says that we can tell our landlords that we have to delay payment. If the Landlord agrees, good, if not, you either close the business or pay rent for the duration that you can’t make income.” says Mr Elvin Poh, owner of Outbar

The month long Circuit Breaker measures in Singapore has hit many industries very badly, leaving many people having to bear the brunt of the oncoming recession.

One of the hardest hit areas were the Entertainment and Food & Beverages Industries. What started with social distancing measures cutting down the maximum capacity by half or more in some cases, it eventually lead to the closure of all services.

Further measures were also introduced later in the month of April that lead to the closure of other businesses that were deemed non-essential businesses. With the deadline of 5 th May coming in the following week that might see some relaxation of the extended Circuit Breaker measures , the future is uncertain for how and if these businesses will survive this period of closure.

In this series, we hope to ‘Bridge’ the gap between the SME’s and our investors, to help both parties better understand the difficulties faced by each other.

Mr Elvin Poh, the owner of Outbar, is one of the many businesses who are facing this crisis. Having started 7 years ago, this bar is located at Neil Road, one of the busiest streets that branches out from the CBD area.

While mainly seen as an after work place for drinking, Outbar has been home to many a team-bonding event run by the offices near its vicinity. Many of the regulars are not just the people who work nearby but also those who live nearby, given its comfortable and cozy atmosphere despite being located near one of the busiest places in Singapore.

Even though it’s situated near many Karaoke Bars and also listed as an Entertainment Venue, you’ll find a different situation at Outbar, where the focus is on the people around you and having a good time.

Despite the fact that Outbar is part of the F&B industry, due to it’s classification as an Entertainment Venue, it was one of the earliest victims to the Circuit Breaker measures deployed by the government to curb the rise of COVID-19 in Singapore.

With it’s lion’s share of the revenue coming from alcohol instead of food, they were closed in mid-march without having the option of being able to offer delivery or takeaway for their customer base.

One of the biggest problem’s Mr Poh is facing now is cashflow. Despite all income cut off due to the strict regulations, debtors and suppliers are still coming to collect. Even though they’re closed for the month of April, since most suppliers work of a line of credit for 30 to 60 days, there’s still the bills of March to pay.

Another major issue is rent. While the government is providing a tax reimbursement of up to $6000, per tenant, it would only assist them with the month of April. With May barely a stone’s throw away right now, the grant money has been used to cover the cost of rent in April but it now leaves May as a huge deficit due to extended Circuit Breaker measures.

“We do hope more can be done, but there’s a lot of businesses to help and not everyone can be taken care off,” Mr Poh says in the interview. “The government says that we can write a letter or email to the landlord to tell them that we have no money and that we have to delay payment. If the Landlord agrees, good, if not, you either close the business or pay rent for the duration that you can’t make income. May is the first month, with rent at $5000 a month, what happens in July? If it stretches till July that’s $15,000 to pay.”

While Mr Poh has a good relationship with his landlord, there’s still an issue of payment. The landlord still has his own rent and costs to pay, so there hasn’t been a confirmed answer on the rental. Choosing to work with just the tax rebate first, Mr Poh hopes that a solution will come soon.

While most Circuit Breaker measures will come to an end in June, Mr Poh expects that venues like his will only start operating again sometime in mid June to early July. Even if they’re open there is no guarantee that they’ll be operating at 100% capacity. The earliest he thinks it’ll take before it all comes back to normal is at least another 4 to 5 months.

Mr. Poh ends the interview saying that he understands everyone is in the same boat but he hopes everybody can stay positive and help each other however they can.

We hope you’ve enjoyed this article. When the economy is adversely impacted, the first to struggle will always be SMEs. They will need our understanding and & support through this period of time. Enter our poll and tell us about your willingness to help our good local SMEs!