Yountville’s acclaimed French Laundry received multiple loans through the Paycheck Protection Program, totaling more than $ 2.4 million, according to an ABC7 analysis of recently released data from the Small Business Administration.
The French Laundry received two loans, both of which were approved on April 30, 2020. According to the SBA, the initial loan was more than $ 2.2 million to keep 163 employees. The second loan was for $ 194,656 to keep five employees.
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ABC7’s analysis found that the company received 17 times more than the average Bay Area restaurant.
“I’m angry, but what can I do about it?” said Dennis Berkowitz, former owner of Vault 164 restaurant in San Mateo.
Berkowitz struggled to get about $ 318,000 to keep about 50 employees. The loan amount was not enough to support his business and he was forced to sell the restaurant in July.
“I’ve had a 40-year run in the restaurant business, so I consider myself lucky,” he said. “I feel really bad for the next generation of restaurateurs because they are screwed.”
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The I-Team analyzed thousands of California loans released by the SBA showing that wealthier, large companies often get access to loans before small mom and pop owners. Of all approved loans in California, 91 percent of larger restaurants with 300 or more employees got their loan in April, compared to only 52 percent of smaller restaurants with 100 or fewer employees.
At the French Laundry, you can book an exclusive outdoor dining experience from $ 450 per person or a dinner of white truffle and caviar for $ 1,200 per person, according to online reservation services.
The company’s website states that the 1,600-square-foot building is owned by celebrity chef Thomas Keller. Keller approached 60 investors to launch the restaurant in 1994.
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ABC7 reached out to the French laundry several times for comment and to confirm how many employees the company could keep on its payroll for each loan. We have yet to hear.
French Laundry is one of at least seven Bay Area restaurants with two or three Michelin stars to also receive PPP loans, according to the SBA. The list of the other six restaurants are: Saison, Acquerello, Benu, Atelier and Californios Restaurant Group.
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California’s Val Cantu received about $ 214,597 to keep 10 to 14 people.
“We’re still trying to figure out how to spend it properly,” Cantu said. “That is and will remain cloudy.”
Cantu told ABC7 the confusion stems from how many times the SBA’s rules changed during the early part of the process.
“Whether the PPP will be forgivable … we’ll see, I’m not sure it will happen,” he said.
Cantu admitted that the restaurant benefited from having an accountant to assist with the credit application.
“It was definitely a scary process,” he said.
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Theresa Pasion, owner of the Mission’s La Palma, agreed. Although, like other small family businesses, she had no internal financial assistance.
“It was very intimidating, the hiring process,” she said. ‘As soon as you look at it, you have questions. You are liable for everything you enter incorrectly. ‘
Laurie Aaronson is a financial advisor who serves hundreds of Bay Area restaurants. For the past seven months, she has been committed to helping her customers qualify for PPP funding.
Laurie: It is clear that those who had established banking relationships with banks who chose to participate at least in the early stages … those who had access to financial advisers, accountants and lawyers to understand the application received the loans. “
Stephanie: “What needs to change from your perspective to make access to finance more equitable?”
Laurie: “I think the Fintech companies will be the key, as I think they leveled the playing field a lot in the late stages of the final round of PPS.”
Fintech companies, or in other words, online banking companies, helped bridge the gap when larger banks were unable to process large amounts of loans.
Kabbage is an example. More than 90 percent of the company’s job applicants have 10 or fewer employees. The company has been touted for prioritizing community banks serving small businesses in non-urban areas. For example, their average loan size was about $ 28,000 – nearly four times less than the national average size of a $ 107,000 PPP loan.
“In the late stages of the second PPP round, many banks simply closed their doors, Fintech companies stepped in and provided many of those loans,” Aaronson said.
Check out all of the Bay Area companies that have received loans in the table below:
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