Month: March 2020

Experiences, comments, and suggestions for restaurant businesses dealing with COVID-19

March 30th, 2020

Our Larimer Small Business Development Center (SBDC) advises a large number of restaurant and food products businesses and entrepreneurs.   We’re extremely fortunate to have two experienced restauranteurs as consultants, Tiffany Helton with Stuft Burger and John Verderame, veteran of several high-profile  restaurants.

Here are some of their experiences, comments, and suggestions for restaurant businesses dealing with the COVID-19 virus impact:

John, a New York City native,  says “After 9/11 we really pushed to get people back in-house. While that’s not possible right now, a great way to bring in some cash, while keeping contact with your customers, is to promote and sell your gift cards.”  He added “I’ve seen a lot of activity within the last week where some bars/restaurants are expanding  their takeout business to include things like, purchasing full meals for delivery, selling alcoholic beverages for pickups, and advertising gift card and virtual gift card systems. Another trend I’m seeing is for restaurants in food production facilities to do meal preparation programs that are tailored towards specific diets and restrictions.” 

Tiffany, co-owner of three Stuft burger restaurants in Northern Colorado says “We’re a full-service sit-down model of restaurant. We considered trying a take-out option, but we estimated that we would only do 20-30% of our normal sales, and at those numbers, we couldn’t afford to stay open.  It was in the best interest of our staff to lay them off, so they could quickly file for unemployment. The businesses that have chosen to stay open are at least paying operating expenses, but not covering much payroll.”    Tiffany provided her team with unemployment insurance information through the Colorado Department of Labor and Employment.

Both Tiffany and John acknowledged that “take-out places are doing well”.  

They encourage other restauranteurs to quickly contact their leasing/property managers, to see what can done to discuss and negotiate reductions and/or delayed payment.  “People are being flexible, a lot of restaurants are in the same situation.”  Tiffany is applying for an SBA disaster loan.  She says “the cash flow is important, I only have a certain amount in reserve.”  

Tiffany and John are available for one-on-one consulting through the Larimer SBDC.  

Please see our website to schedule an appointment, and learn more about COVID business recovery resources, including funding resources.

www.larimersbdc.org        970-498-9295                    www.lovelandbusiness.com     970-667-4106

Eligible Entities

Applicants must meet the SBA requirements of a small business (500 employees or fewer) Businesses directly affected by COVID-19 Businesses that offer services directly related to the businesses in the declaration Other businesses indirectly related the industry that are likely to be harmed by losses in their community (Example: Manufacturer of widgets may be eligible as well as the wholesaler and retailer of the product)

SBA Disaster Loan Link / Information

SBA Economic Injury Disaster Loans

Applicants must meet the SBA requirements of a small business (500 employees or fewer)
Businesses directly affected by COVID-19
Businesses that offer services directly related to the businesses in the declaration
Other businesses indirectly related the industry that are likely to be harmed by losses in their community (Example: Manufacturer of widgets may be eligible as well as the wholesaler and retailer of the product)

  • Agricultural Enterprises: If the primary activity of the business (including its affiliates) is as defined in Section 18(b)(1) of the Small Business Act, neither the business nor its affiliates are eligible for EIDL assistance.
  • Religious Organizations
  • Charitable Organizations
  • Gambling Concerns (Ex: Concerns that derive more that 1/3 of their annual gross revenue from legal gambling activities)
  • Casinos & Racetracks (Ex: Businesses whose purpose for being is gambling (e.g., casinos, racetracks, poker parlors, etc.) are not eligible for EIDL assistance regardless of 1/3 criteria above.
  • Cannabis Industry
  • Credit History: Applicants must have a credit history acceptable to SBA.
  • Repayment: SBA must determine that the applicant business has the ability to repay the SBA loan.
  • Eligibility: The applicant business must be physically located in a declared county and suffered working capital losses due to the declared disaster, not due to a downturn in the economy or other reasons.
  • Eligible entities may qualify for loans up to $2 million. 
  • The interest rates for this disaster are 3.75 percent for small businesses and 2.75 percent for nonprofit organizations with terms up to 30 years. 
  • Eligibility for these working capital loans are based on the size (must be a small business) and type of business and its financial resources.  
  • Eligible entities may qualify for loans up to $2 million. 
  • The interest rates for this disaster are 3.75 percent for small businesses and 2.75 percent for nonprofit organizations with terms up to 30 years. 
  • Eligibility for these working capital loans are based on the size (must be a small business) and type of business and its financial resources.  
  • Completed SBA loan application (SBA Form 5).
  • Tax Information Authorization (IRS Form 4506T) for the applicant, principals and affiliates.
  • Complete copies of the most recent Federal Income Tax Return.
  • Schedule of Liabilities (SBA Form 2202).
  • Personal Financial Statement (SBA Form 413).
  • Income, balance sheet, and cash flow documents.
  • Other Information may also be requested.
  • Complete copy, including all schedules, of the most recent Federal income tax return for principals, general partners or managing members, and affiliates (see filing requirements for more information)
  • If the most recent Federal income tax return has not been filed, a year-end profit-and-loss statement and balance sheet for that tax year
  • A current year-to-date profit-and-loss statement
  • Additional Filing Requirements (SBA Form 1368) providing monthly sales figures (This is especially important for Economic Injury Disaster Loans)

 

  • Small businesses that submit complete loan packages could receive the money within three (3) weeks
  • Incomplete information and verification of collateral will delay the approval process

 

 

  • Include the specific disaster in your application – specifically reference “COVID-19” or Coronavirus
  • Apply online vs by mail (Applying online is best)
  • Write your password down; neither the system nor any personnel are able to retrieve it
  • Save your work at every prompt
  • Do not rush through the application. Check and recheck the filing requirements to ensure that all the needed information is submitted. The biggest reason for delays in processing is due to missing information.
  • Make sure to complete all filing requirements before submitting the application and forms
  • Be sure to use the same contact information (business name and the name of all owners) that you use on your federal tax returns. Double-check that they match
  • If your tax returns reference other businesses that you own, you must also submit those tax returns in order to avoid processing delays
  • If more funds are needed, applicants can submit supporting documents and a request for an increase. If fewer funds are needed, applicants can request a reduction in the loan amount.
  • If the loan request is denied, the applicant will be given up to six months in which to provide new information and submit a written request for reconsideration
  • As you consider applying for the different federal funding sources available for Colorado businesses, the following information can help you make the best choices for your situation: 

     

    1) Federal funds carry program-specific restrictions and it’s important to know and protect your options. Review each program thoroughly. Your approval and acceptance of a loan from one federal program may cause you to be fully or partially ineligible for other sources of federal funding. 

     

    2) Different federal funding such as loans and grants from multiple agencies will roll out at different times, so it’s important to consider the timing of the funding source.   

     

    3) Federal economic disaster recovery loans are accessible right now for qualified businesses; however, no federal economic disaster recovery grants have been announced. Unfortunately, for businesses seeking immediate help, there is no way to predict which future federal tools – including grants – may be employed as COVID continues to impact the US economy. This can place businesses in the challenging position of weighing an immediate federal tool against the possibility of future programs that may or may not be offered, with requirements yet to be determined.   

     

    We are committed to sharing news of all new economic recovery resources (both state and federal) as they become available and are here to be your guide through this challenging time.

  • All Colorado counties are represented as being located in a certified disaster declaration area. Currently the site is struggling with the traffic load. We would encourage anyone who can to access the site after peak hours (7pm to 7am MST).

  • Applicants may apply online using the Electronic Loan Application (ELA) via SBA’s secure website at https://disasterloan.sba.gov/ela
  • Paper loan applications can be downloaded from www.sba.gov/disaster. Completed applications should be mailed to:
    U.S. Small Business Administration
    Processing and Disbursement Center
    14925 Kingsport Road
    Fort Worth, TX 76155
  • Disaster loan information and application forms may also be obtained by calling the SBA’s Customer Service Center at 800-659-2955 (800-877-8339 for the deaf and hard-of-hearing) or by sending an email to disastercustomerservice@sba.gov.

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Support Local Restaurants with Delivery!

With the closure of local restaurant dine-in options, it’s more important than ever to utilize delivery services to help these businesses stay afloat, as well as the drivers who are often contract employees. If you’re doing your part and social distancing, there are still ways that you can support the local economy that provides our community with so much flavor! Many of the largest delivery services are stepping up to help people stay safe and support our local economy in big ways. Check below for information whether you are a business, consumer, or driver.


For Businesses:

DoorDash: Zero commissions for 30 days on deliveries – no merchant will be asked to pay anything back, for both new and existing customers. There is also an additional $20 million earmarked for marketing programs to generate additional revenue for existing DoorDash restaurants.

Uber Eats: All fees are currently waived, and same-day payouts are available for any existing Uber Eats restaurant who requests it to assist with cash flow uncertainty.

NoCo Nosh: More businesses are signing up for the local service, but no info on if they’re waiving fees.

Grubhub:
Temporarily suspending the collection of commissions from restaurants, and also supporting immediate and ongoing cash flow relief to qualified restaurants.

Postmates: A
pilot exists for waiving commission fees in the SF-Bay Area, but no word on if the program has been expanded in light of new dine-in restrictions nationwide.


For Consumers:

DoorDash: Drivers have switched to a no-contact method of delivery between Dashers and customers as the default option. They’ll leave your food right at the door and send you a text to confirm.

Uber Eats: You can request for your order to be left at the door rather than having contact with the driver.

NoCo Nosh:
Offering no-contact delivery since Friday.

Grubhub: They created a “Donate the Change” charitable program to support restaurants and drivers affected by the COVID-19 crisis. Round up on your order to help!

Postmates: No-contact delivers to allow for distance between customers and Postmates.


For Contract Employees/Drivers:

DoorDash:
Drivers who are sick or recovering may be eligible for 14 days of financial assistance from the company, and they are shipping gloves and hand sanitizer to Dashers and Caviar couriers.

Uber Eats:
Drivers have been asked to self-isolate if they’ve been diagnosed with  COVID-19 and will receive 14 days of financial assistance while their accounts are on hold. They are also protecting the Uber Pro status of their qualifying drivers and have assistance available if you rent a vehicle to drive.

NoCo Nosh:
Providing drivers with hand sanitizer and gloves for their 80 drivers.

Grubhub:
“Donate the Change” can help with financial hardship due to the current crisis.

Postmates:
“Postmates Fleet Relief Fund” helps to cover the costs of co-pays and medical expenses related to COVID-19, regardless of diagnoses, plus an additional 2 weeks of paid sick leave.


Take the time to try someplace new from the comfort of your own home as we adapt!


Sources:

DoorDash: https://blog.doordash.com/supporting-local-businesses-and-communities-in-a-time-of-need-41c0742fbc03

Uber Eats: https://www.uber.com/us/en/coronavirus/

NoCo Nosh: https://www.coloradoan.com/story/news/2020/03/16/coronavirus-restaurants-close-delivery-sites-brace-impact/5058940002/

Grubhub: https://media.grubhub.com/media/press-releases/press-release-details/2020/Grubhub-and-Major-Cities-Across-the-US-Launch-Economic-Relief-Effort-up-to-100-Million-for-Independent-Restaurants-and-Delivery-Partners-Impacted-by-COVID-19/default.aspx

Postmates: https://blog.postmates.com/postmates-coronavirus-covid-19-response-94eef5b1bbc2

Written by Kat Rico with the Loveland Business Development Center

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