The acclaimed French laundromat in Yountville received several loans through the Check Protection Program, totaling more than $ 2.4 million, according to an ABC7 analysis of data recently released by the Small Business Administration.
The French Laundry received two approved loans on April 30, 2020. According to the SBA, the first loan consisted of more than $ 2.2 million to retain 163 employees. The second loan was $ 194,656 to retain five employees.
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ABC7’s analysis found that the company received 17 times more than the average restaurant in the bay area received.
“I’m angry, but what can I do about it?” said Dennis Berkowitz, former owner of the San Mateo Vault 164 restaurant.
Berkowitz struggled to raise about $ 318,000 to retain about 50 employees. The loan amount was not enough to keep his business going and he was forced to sell the restaurant in July.
“I’ve had a 40-year career in the catering business, so I consider myself lucky,” he said. “I feel really bad for the next generation of restaurateurs because they’re screwed.”
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The I-Team analyzed thousands of California loans granted by the SBA that show that larger, richer businesses tend to access loans before small homeowners. Of all California-approved loans, 91% of the largest restaurants with 300 or more employees got their loan approved in April, while only 52% of smaller restaurants with 100 or fewer employees.
At French Laundry, you can book an exclusive outdoor dining experience starting at $ 450 per person or a dinner of white truffle and caviar for $ 1,200 per person, depending on online booking services.
The company’s website indicates that the 1,600-square-foot building is owned by famed chef Thomas Keller. Keller targeted 60 investors to launch the restaurant in 1994.
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ABC7 contacted French Laundry several times to comment and confirm how many employees the company was able to keep on payroll for each loan. We still have to know nothing.
French Laundry is one of at least seven restaurants in the Bay Area with two or three Michelin stars that also received PPP loans, according to the SBA. The list of the other six restaurants includes: Saison, Acquerello, Benu, Atelier and Californios Restaurant Group.
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Val Cantu de Californios received about $ 214,597 to retain 10 to 14 people.
“We keep trying to figure out how to spend it properly,” Cantu said. “That has and continues to be cloudy.”
Cantu told ABC7 that the confusion stems from the frequency with which SBA rules change during the beginning of the process.
“If the PPP is forgivable … we’ll see, I’m not sure if it will be,” he said.
Cantu admitted that the restaurant benefited from having an accountant to help with the loan application.
“It was definitely a scary process,” he said.
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Theresa Pasion, owner of the La Palma mission, agreed. Although, like other small family businesses, it did not have its own financial aid.
“It was very intimidating, the application process,” he said. “As soon as you look at it, you have questions. Anything you fill in wrong is responsible.”
Laurie Aaronson is a financial consultant serving hundreds of restaurants throughout the bay area. For the past seven months, he has focused on helping his clients obtain 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 advisors, accountants and lawyers to make sense of the application received the loans.” .
Stephanie: “From your perspective, what needs to change to make access to finance more equitable?”
Laurie: “I think Fintech companies will be key, because I think they leveled the playing field a lot in the final stages of the last round of PPP.”
Fintech companies, or in other words, online banking companies, helped bridge the gap when larger banks could not process a high volume of loans.
Kabbage is an example. More than 90% of the company’s applicants have 10 or fewer employees. The company has been awarded for giving priority to community banks that serve small businesses in non-urban areas. For example, its average loan size was around $ 28,000, almost four times less than the national average PPP loan size of $ 107,000.
“In the final stages of the second round of PPP, many banks closed their doors, Fintech companies intervened and provided many of these loans,” Aaronson said.
See all companies in the Bay Area that received loans in the table below:
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