These well-known NC restaurant names were approved for PPP loans. Some didn’t take it.
Names like Wendy’s, Bojangles and K&W Cafeteria were approved for the largest Paycheck Protection Program loans for restaurant companies in North Carolina.
Earlier this month the United States Small Business Administration released data for PPP recipients, naming companies that had been approved for at least $150,000 in federal loans, as well as data on companies approved for loans below that threshold.
The data shows the level of loans that companies were approved for, but not necessarily how much money, if any, they received.
According to the SBA data, fast-food franchisees and chain restaurants received the largest aid among food service companies in North Carolina.
Loans between $5 million and $10 million were approved for Charlotte-based Bojangles, as well as two Bojangles franchisees, Charlotte-based Wendy’s franchisee Carolina Restaurant Group, K&W Cafeteria, Tupelo Honey, LM Restaurants and Hickory Tavern.
Dozens of other fast-food franchisees were approved for loans between $2 million and $5 million, representing nearly all of the nation’s major brands. The corporate office of Golden Corral was also approved for loans between $2 million and $5 million.
Approved but loan not accepted
Bojangles spokesman Brian Little said the company applied and was approved for PPP money, but that the popular fast-food chain didn’t accept the loan.
“During the initial days after the launch of the PPP Loan program, we applied for and were approved for a PPP Loan,” Little said in an email. “We ultimately decided not to proceed with the loan and did not receive a PPP loan. However, we were included in a published list of PPP Loan recipients, even though we never signed loan documents or accepted funding.”
According to PPP data from the SBA, more than 1,100 restaurant companies in North Carolina were approved for loans of at least $150,000.
The PPP loans were conceived at the beginning of the COVID-19 pandemic as a way to keep small businesses afloat while many shut down to stop the spread of the virus. The loans incentivized companies not to lay off workers by forgiving funds used for payroll. Eligible companies could have no more than 500 employees to qualify for the loans.
Of the restaurant companies and franchisees approved for PPP loans, many reach the limit of eligibility, reporting that the funds would preserve 500 jobs at the respective companies.
LM Restaurants, which owns Carolina Ale House, Taverna Agora and other restaurants in Raleigh and Wilmington, was approved for the largest loan for Raleigh full-service restaurant companies at between $5 million and $10 million.
Amber Moshakas, president of LM Restaurants, whose family started the company, said with the PPP funds the company rehired 1,500 of the 1,900 workers it laid off at the beginning of the pandemic.
“We’d be in an incredibly different place (without the PPP funds),” Moshakas said. “It’s been an incredible lifesaver.”
PPP loans at work
The coronavirus pandemic has upended the restaurant industry. And with case counts still high, most restrictions remain in place.
North Carolina restaurants spent two months running takeout operations or closing altogether, before being able to open at 50% capacity in late May. Dozens of Triangle restaurants have already closed.
The PPP loans were approved in two rounds in April. Many small companies struggled to get funding in the first round, as the program ran out of money in its first weekend. Most were more successful in the second round weeks later, but for some companies the money was too little too late.
Initially, PPP funds had to be used in eight weeks, but that deadline was later tripled, giving companies 24 weeks. Restaurant owners criticized the early version as ineffective, as many spent April, May and June closed, with no employees to pay for work.
Kevin Jennings, whose company Urban Food Group owns Raleigh restaurants Vivace and Coquette, among others in the state, was approved for a loan between $2 million to $5 million, among the highest for local full-service restaurant companies. He said the company ended up accepting a loan of $1.9 million, which he said was essential to keeping the restaurants in business.
“Without sales in our restaurants, it was not an option to not seek some kind of assistance,” Jennings said. “I’m not in a position to support operations with personal wealth. ... The world didn’t stop. The banks still expect to get money.”
Jennings said lenders have been flexible in light of the pandemic and that he’s continued to make rent payments without asking for deferments.
The popular Raleigh steakhouse the Angus Barn was approved for a loan of at least $2 million, which preserved 353 jobs, according to SBA data. Angus Barn owner Van Eure said the funds were used almost entirely on payroll.
“I thought the PPP was extremely helpful,” Eure said. “It kept our employees OK for the months that we were closed. But I know nothing is free. This is going to have to be paid back.”
The Angus Barn is one of the country’s busiest independent restaurants, serving hundreds of thousands of meals each year. When North Carolina moved into Phase 2 of its coronavirus reopening plan, the Angus Barn was among the restaurants opening up for service the first night. But Eure said the situation remains challenging, with a half-filled restaurant, as the company is still prevented from hosting private events.
“No restaurant is able to make money at 50 percent,” Eure said. “If you’re breaking even you’re lucky. Any restaurant operating at 50 percent is struggling.”
Staff writers Zachery Eanes, Sophie Kasakove and David Raynor contributed to this story.
