Paycheque Protection Program Loan for Potbelly
Instead of JPMorgan Chase, the originator of Potbelly’s previous PPP loan, the chain secured the loan from Harvest Small Business Finance, based in Laguna Beach, Calif., A non-bank lender launched four years ago by a New York-based investment management firm. Harvest has focused on PPP lending, although its target borrower is considerably smaller than the public company Potbelly.
“Although we have stabilized our business over the past few months, we are still well below pre-COVID sales levels. In addition, the virus continues to create an uncertain environment in many parts of the country,” said Potbelly in a press release. . “Although we qualified for a loan in the first round of the Payroll Protection Program, we returned it when it looked like many other businesses would be left without help. In the next round, the program was about to end with still billions of dollars of funds available. To protect the jobs of our employees and support their families who depend on Potbelly for their livelihood, we applied for and got a loan. The funds will go to our dedicated employees, to preserving jobs and keeping stores open. “
The chain has 424 of its own locations, and 44 more are owned by franchisees. It employs more than 5,500 people across the country.
In April, Potbelly was among several publicly owned fast food chains that got the most out of P3 loans while small independent restaurants struggled to access federally subsidized money to keep their employees. employees when they could not open or manage their regular operations.
These chains were the subject of fierce criticism from borrowers who were initially excluded from the program, as the first authorized amount was quickly requested. Virtually all of them chose to return the money after the Treasury Department issued guidelines framing PPP loans for companies that had easy access to private capital.
Potbelly decided to return the 10 million dollars April 25. Quickly, her bank, Chase, tightened the terms of a previous $ 40 million loan she had made to Potbelly. The sandwich chain felt compelled to issue a warning that it may not last as a going concern over the coming year.
More recently, Potbelly’s income have recovered, and he lifted the “going concern” warning on August 6, the day before the PPP loan closed. It is not known why Potbelly waited a week after obtaining the loan to disclose it to investors.
The company has a new CEO, Robert Wright, whom he hired from Wendy’s last month. He was the chief operating officer of this channel.
Crain Communications, the parent company of Crain’s Chicago Business, received money under the federal government’s Paycheck Protection Program.