Still waiting for RRF funds? Maybe consider COVID EIDL Expansion program
If your restaurant is in search of working capital and you haven’t received a RRF grant, check out the SBA’s expanded EIDL program. This program has $100 bil to lend and you can apply through an on-line portal on the SBA;s website until 12/31/21 or when the funds run out.
The EIDL program provides for low interest 3.75% debt with a 30 year term, max of $2 million per location/max of $10 million per restaurant group. Also, automatic 2 year deferral of payments. You apply based on how you file your tax returns.
If you were in operation before January 1, 2019, your maximum eligible loan amount is calculated as follows: 2019 gross receipts or sales (line 1 or 1a on most tax returns) minus 2019 costs of goods sold (Line 2 from most tax returns) multiplied by 2 for a max of $2 million.
For applicants that began operations partially through 2019 or 2020, SBA will calculate your maximum eligible loan amount.
To qualify:
Program Size standards apply – 500 or less employees per physical location allowed in various NAICS codes that have been especially hard hit by COVOID; no more than 20 locations allowed;
Affiliation requirement – only: businesses you control or in which you have 50% or more ownership
Your business must be in operation on or before January 31, 2020 to apply.
You can use the funds for general working capital purposes: payroll, rent, operating expenses. You cannot use the funds: 1) Expand your business; 2) Make prepayments on debt that is owned by a federal agency (including SBA) or an SBIC, or 3) Start a new business
Check it out – if you need help, you can reach me at CLA karen.blacik@claconnect.com
Karen is a Principal in the CLA Bizops practice specializing in serving restaurant clients as a CFO. She has 25 years of experience in the retail and restaurant industry with senior management positions at Wilsons Leather, Famous Dave's, and a division of Hallmark Cards. She is based out of Minneapolis, MN
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