I’ve talked to quite a few restaurant owners about the Payroll Protection Program, the Small Business Administration and the federal government’s promise of loans to restaurants in need.
A majority of the restaurateurs I spoke with had not filed paperwork for loans but had planned to do so soon. One declined to comment until hitting the submit button. Others, including Todd Hung of Wu Wei Din in Plano and Taylor Samuels of Las Almas Rotas, were speaking to their accountants and organizing their files.
April Kao, of Royal China, summed up the mood of the yet-to-file: “I don’t know,” she told me, but with a smile. “There are so many restaurant businesses applying for that, hopefully they have a little share for us!”
Xay Senephoumy, at Sapp Sapp Lao and Thai Kitchen in Irving, has a skeptical reply to that.
“If you haven’t done anything yet, you’re so far behind,” he says. “They distribute it first come, first served, and Texas was the 21st state that got accepted by the SBA. You gotta think, there’s 20 states worth of people like me who applied before I got to, and I’m sure they’re all waiting, too.”
Manhattan Project Beer Company's Misty Sanford isn’t counting on the loan program at all.
“To be honest, we don’t want more debt,” Sanford says. “And there’s personal guarantees on some of it. It’s not very appealing, so the answer for now will probably be a soft no. We restructured how we operate, and we’ve spent the last three weeks scrutinizing our accounting so that we don’t have to take on more debt. I know it’s perceived as being free money, with the rate so low, but it’s still debt that we don’t want as a growing business.”
For the rest of this article, I am going to hand the megaphone over to two restaurant owners in particular who have actually applied for federal assistance and have experience with the loan process.
Joshua Babb leads four different establishments, and Xay Senephoumy applied on behalf of Sapp Sapp, where he estimates that business is down 90%.
These two restaurateurs have had very different experiences navigating the twisting corridors of finance. Babb’s story is optimistic, because he has a helpful and communicative bank, but even he hasn’t seen a dime yet. Senephoumy, meanwhile, tells a starker tale of broken links, crashed servers and mass confusion.
I spoke with both owners April 8. It’s entirely possible that their circumstances have changed since, but here’s a snapshot from each owner of where they stood, and how they felt, midway through their attempts to get federal aid.
Xay SenephoumySapp Sapp Lao and Thai Kitchen
“I applied all the way. I applied pretty much — when the SBA accepted Texas’ declaration, I applied. Since then I keep seeing the SBA website changing. On my end as a recipient, nothing has happened. Recently we heard that the banks are supposed to be the ones that are the underwriters. My bank sent their business owner clients a link. That link was never able to be used. It was shut down by the time we clicked on it, saying, due to overwhelming response on the applications, they needed to shut down and get caught up.
“I personally have never gotten to do that yet, the underwriting with the banks, but I did everything that I needed to do on the SBA side. They changed their format like five different times. I submitted a new one with every rendition.
“I got declined initially because when the system — it was supposed to be fast-tracked and cut through the red tape, dish it out to Main Street, right? I got declined initially because they were processing it wrong — even though we were filing under EIDL, which is COVID-19, they were declining most of us because they were running it as a regular SBA loan, where you have to have great credit and all those stipulations.
“I was heartbroken, and then after the first congressional signatures, a couple days after that, SBA sent me an email saying, although you’ve been declined the first time, we’re going to take your app into consideration under the new federal guidelines.
“I haven’t heard from anybody since.
“I spoke with about 30 friends in six or eight different states. They were all in the same boat as I was, nobody had received anything. This crosses all racial boundaries, there were white business owners, some Mexican business owners. That had nothing to do with it at all.
“January and February I was down about 50% [of sales]. I started having to use cash reserves. After February to this day, I’m at a loss of about 90%. Even that, as terrible as it sounds, at least I’m here on location feeding some customers. But I look to my right and left, and I see a lot of people who are wiped out.
“We used to think a month ahead before this started, but we don’t anymore. We’re just trying to take it week by week, day by day. Thinking about it like that alleviates the stress.”
Joshua BabbChopShop, ChopShop Live, Musume, Shooters
“I have no problem filling out a lot of shit, getting the documents together. It’s a lot of work for four to five hours, but you’re going to get tens of thousands of dollars. The idea that it’s coming in the next month, it’s not going to happen. I don’t know one person who’s gotten it.
“For Shooters, the bank came back and they told us that we’re only eligible for $14,000 because our payroll is so low over there. It’s a tiny space, only 2,000 square feet. You really gotta use the money for payroll. For us over there, we’re going to take the money, we’re going to pay a couple months’ salary for my managers, and that will be it.” (The $14,000 was an estimate and is not yet approved or guaranteed.)
“At Musume, I went to all the partners and I raised $19,000 for all the tipped employees when we first closed. They all had an even split. They took $1,600 home. But that was three weeks ago. They’ve all signed up for unemployment, but not one has gotten a check yet. We’re three weeks removed from me laying them off, and they haven’t gotten a check.
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“If you remember, Trump said, 'Hey, we’re going to have these [small business loans] ready to go by Friday.' Our bank didn’t know the process. On Saturday, a weekend day, they actually contact us and they say, 'Hey, here’s all the stuff we’re going to need from you.' We rounded up everything and we sent it. It’s a lot of documents. For example, I have over 20 investors at Musume. And they want their LP [Limited Partnership] agreements from all of them. You can imagine how much work that is. Shooters, I have three partners, so that was super easy. Musume, I’ve got 25 partners.
“We’re trying to prepare, what if they want a hard copy, we’ll print them out just in case. We keep hearing also that when the money’s gone, it’s gone. So we were saying, we gotta get everything in as soon as we can.
“They emailed us four or five times today saying, ‘Here are more things we need’ that weren’t on the list originally, so we’ve been sending them in.
“Now we’re just waiting. But the good news for us is I know they’re working on it because they’ve called us.”