Restaurant Groups Make Strategic Decision To Leverage More SBA EIDL Loan Fund

SAN FRANCISCO, CA / ACCESSWIRE / November 20, 2021 / The Small Business Administration (SBA) shut down the Restaurant Revitalization Fund (RRF) program almost as quickly as it opened it. Due to high demand, restaurants submitted 278,304 SRR requests for a total of $ 72,233,280,031. Only a small percentage of these restaurateurs have received funding. A total of 101,004 restaurants received $ 28,574,979,472 in EIDL funds. This has left many other restaurant owners, restaurateurs and managers scrambling for what to do next, especially restaurant groups and chains with multiple owned locations.

Ownership of a restaurant cluster was approved for an SBA EIDL disaster loan after missing the RRF program. Image Credit: 123rf / Wavebreak Media Micro.

“Restaurants are one of the hardest hit industries throughout the pandemic. Restaurant groups that have many locations face multiple times the stress and headaches with each location. Even locations that are lucky enough to have many locations. to increase their income during COVID, still face labor and supply chain issues. More income comes with a higher cost to do business, “said Marty Stewart , Strategy Director of Disaster Loan Advisors (DLA).

DLA is a strategic consulting SBA credit counseling firm which specializes in assisting restaurant groups and property with multiple location entities, to help navigate each restaurant / retail location for maximum EIDL qualification. Locations that have received previous SBA EIDL loans that require an increase or modification (up to $ 2 million maximum), as well as EIDL loan review requests for locations that have been denied.

“In some cases, we have CEOs, CFOs, or COOs from restaurant groups or national chains coming to us with many sites that need help. Some need increases, others need reconsideration. The EIDL loans, but were then turned down for an increase in EIDL, ”Stewart continued.

Restaurant groups, national chains and franchise locations Next strategic move

With the RRF closure On July 2, 20201, initially enacted by President Joe Biden as part of the US bailout, the program provided much needed economic aid to restaurants and other establishments struggling to make ends meet due to the pandemic.

Unfortunately, with only 37% of restaurant applicants receiving RFF funding, many other restaurant owners, restaurant groups, executives and managers with multiple locations found themselves scrambling to make up for losses by location across the board. industry.

The SBA will continue to provide economic aid to help restaurants recover from critical aid through programs such as Economic Disaster Loans. [EIDL].

“The most strategic decision that can be made in trying to get more EIDL funds for each restaurant location is to file broad requests for reconsideration and / or increase demands, depending on the situation of the location of each restaurant. And by bulky I mean long enough letters that tell the whole story of each place, and back it up with facts and documentation. The point is to get a yes, ”said Stewart.

Previous Restaurant Revitalization Fund (RIF) program details

The average size of RRF scholarships awarded to restaurant applicants was $ 283,000:

  • 2.2 percent of dollars approved for $ 50,000 and under
  • 4.9% of dollars approved for $ 50,000 to $ 100,000
  • 5.6 percent of dollars approved for $ 100,000 – $ 150,000
  • 21.2 percent of dollars approved for $ 150,000 – $ 350,000
  • 27.2% of dollars approved for $ 350,000 to $ 1M
  • 16.4 percent of dollars approved for $ 1 million – $ 2 million
  • 18.0 percent of dollars approved for $ 2 million – $ 5 million
  • 4.6 percent of dollars approved for $ 5-10 million

As Congress pointed out, restaurants and bars were eligible for economic aid equal to their lost revenue from the pandemic, with a cap of $ 10 million per business and $ 5 million per location.

Groups of restaurants with multiple locations and other food and beverage related entities

According to SBA guidelines, qualifying business entities that have suffered loss of revenue from the pandemic include:

  • Restaurants
  • Food stalls, food trucks, food carts
  • Caterers
  • Bars, saloons, lounges, taverns
  • Snacks and soft drink bars
  • Bakeries (on-site sales to the public represent at least 33% of gross receipts)
  • Brewpubs, tasting rooms, taprooms (on-site sales to the public represent at least 33% of gross receipts)
  • Breweries or microbreweries (on-site sales to the public represent at least 33% of gross receipts)
  • Cellars and distilleries (on-site sales to the public represent at least 33% of gross receipts)
  • Hostels (on-site food and beverage sales to the public account for at least 33% of gross receipts)
  • Facilities or licensed premises of an alcoholic beverage producer where the public can taste, taste or purchase products

How Catering Groups Can Use Economic Disaster Loan (EIDL) Funds For Their Restaurants

With recent changes to the EIDL program, SBA has relaxed guidelines on how restaurants and other related businesses can use loan funds. The new expanded guidelines for specific expenses include:

  • Company salary costs (including sick leave)
  • Payments on any commercial mortgage bond
  • Commercial rent payments (this does not include prepayment of rent)
  • Company debt service, both principal and interest (this does not include any prepayment of principal or interest)
  • Business utility payments
  • Business maintenance costs
  • Outdoor seating construction
  • Commercial supplies (including protective equipment and cleaning products)
  • Food and beverage expenditure by businesses (including raw materials)
  • Supplier costs covered
  • Business operating expenses

Restaurant Groups and Restaurant Owners SBA Cross-Program Eligibility on EIDL COVID-19 Relief Options

According to the SBA, inter-program eligibility is as follows:

EIDL COVID-19 Candidate

  • May apply for an EIDL and then submit requests to increase funds for that same loan.
  • May request EIDL and RRF.

EIDL COVID-19 beneficiary

  • May apply for an EIDL and then submit requests to increase funds for that same loan.
  • May request EIDL and RRF.

Applicant for the Restaurant Revitalization Fund (FRF)

  • May request EIDL and RRF.
  • The same company cannot apply for the RRF more than once.

Recipient of the Restaurant Revitalization Fund (FRF)

  • May request EIDL and RRF.
  • The same company cannot apply for the RRF more than once.

National Restaurant Association Restaurant Industry Snapshot

The National Restaurant Association (Restaurants.org) released recent industry statistics and national statistics on the impact of the pandemic on the size and scope of the U.S. restaurant industry as a whole.

Overview of the restaurant industry:

  • $ 659 billion: restaurant industry sales in 2020, down $ 240 billion from expected levels
  • 12.5 million: restaurant workers at the end of 2020, down 3.1 million from expected levels
  • 110,000: restaurant locations temporarily or permanently closed
  • 9 out of 10 restaurants have less than 50 employees
  • 7 out of 10 restaurants are single unit operations
  • 8 out of 10 restaurateurs started their careers in the industry in entry-level positions
  • 9 in 10 restaurant managers started entry-level positions
  • Restaurants employ more minority managers than any other industry

The National Association of Restaurateurs is the world’s largest professional catering association. The organization represents and defends the interests of more than 500,000 catering companies.

“With over 110,000 restaurants no longer operating due to COVID, we are keen to work with restaurant groups that have multiple locations to help them get the much-needed additional financial assistance from the EIDL Loan Program to Help to save each of their locations from becoming a statistic, ”said Stewart.

About Disaster Loan Advisors ™

Disaster Loan Advisors™ is a team of trusted professionals dedicated to saving small businesses and businesses from lost sales, lost customers, lost revenue and saving your business from potential financial ruin from this COVID-19 / Coronavirus disaster, and the recent Hurricane Ida 2021 declared a disaster.

DLA specializes in assisting ownership groups with multiple business entities, multiple restaurants and retail groups, and other complex situations that require expert intervention to assess the situation and create the best path. strategic to follow.

Has your small business or business suffered financial losses due to COVID, Hurricane Ida, or other natural disaster? Has your SBA loan application been refused for an EIDL loan? Are you looking to increase your existing SBA EIDL loan (up to $ 2 million) Need some strategic advice before taking your next step?

CONTACT:

Disaster Loan Advisors
Elena goldstein
Director of Media Relations
877-463-9777 ext 3
[email protected]

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For a strategic exploratory conversation, schedule a free consultation call by visiting:

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THE SOURCE: Disaster Loan Advisors

See the source version on accesswire.com:
https://www.accesswire.com/673937/Restaurant-Groups-Strategic-Move-to-Tap-More-SBA-EIDL-Loan-Funds


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