Restaurant closings

[BBatesokc]

Hal Smith decided to keep paying their upper management and said screw you to the employees. Give them a pass if you want to. They did the math early on and said "I'm not giving up a penny more than I have to."

[Pete]

^

Like every small business, they have to try and hold onto the key employees.

Almost all restaurants have let go about 90% of their staff.

[Dob Hooligan]

I can't speak directly regarding Hal Smith, but, I have heard Business Interruption Insurance coverage on other restaurants and bars require complete closure to go into effect. It can become all but impossible to define an actual loss amount if you are doing take out only.

I learned the hard way about 10-12 years ago when an arsonist burned on my shop. Since I chose to stay open and operate at a reduced capacity, the burden of proving my 40% loss in revenue was based on the fires and not on any other cause fell squarely on me. Overwhelming for a small business owner.

[artynok]

You have to remember, as some have mentioned, even if you have some take out business, it's not enough to pay mortgage/rent, loan obligations. I think in a lot of cases the employees are better off laid off so they can be eligible for unemployment.

[Plutonic Panda]

Not OKC but in LA several very high profile restaurants have closed for good the latest one being Nate n Al Deli. I can’t help but think several long time staples in OKC will be gone after this. I hope those like Cattlemen's are able to stick around.

[Rover]

Hal Smith decided to keep paying their upper management and said screw you to the employees. Give them a pass if you want to. They did the math early on and said "I'm not giving up a penny more than I have to."

Curious if you employ anyone.

[BBatesokc]

Curious if you employ anyone.

Nope. I contract with other PI's as I need them - which hasn't stopped during this time, though naturally, business has greatly slowed down. I also give kudos to the law firm I do 70% of my business with - which is also where I office. He sent all his employees home. Everyone keeps getting full pay and benefits until this is over. The office is still open, but he meets with clients either individually at the office or over the phone. He doesn't allow any other lawyers to do jail visits - he does them himself. Essential employees do come in, but they do it when others are not there and the cleaning crew still cleans daily and has upped their attention to detail.

[Executionist]

Not OKC but in LA several very high profile restaurants have closed for good the latest one being Nate n Al Deli. I can’t help but think several long time staples in OKC will be gone after this. I hope those like Cattlemen's are able to stick around.

Incorrect.

https://www.natenals.com/

[SoonerDave]

As far as behaviors changing and reduced capacity becoming a new norm for a while... Rumblings are that Disney doesn't expect to reopen until at least June 1, but even then, will likely reopen only one or two parks, possibly at only 50% capacity, no theater shows, very limited restaurants.

Think of it this way: A corporate monster like Dis ey is literally losing millions of dollars every day this goes on. If it goes on much longer, there's a very real chance they could be looking at *bankruptcy*. Think about that.

Then, from that perspective, if a behemoth like Disney could be in trouble, a small business/restaurant owner's problems suddenly become a lot more vivid.

We got take out from Teds over the weekend. They seemed very busy and it took several calls to get in and place an order. Their online ordering system was broken. Teds has fallen off our radar a bit in the last few years, but surely I don't want to see them gone. Hoping they can figure out a way to survive.

[SoonerDave]

I've heard from a pretty reliable source that Ted's may be toast after this. Hopefully they can get some type of bailout or Hal Smith will take a bigger stake.

I'd be curious if anyone else has heard this about Ted's specifically. They just spent a wad of cash remodeling their S. Western location which reopened the first week of March.

[Teo9969]

Question:

Are the SBA Loans going to be dischargeable through Bankruptcy? I can imagine a lot of businesses are going to take the loans only to turn around and fail within 9 months anyway if unemployment doesn't drop below 8% before year end.

[Pete]

Question:

Are the SBA Loans going to be dischargeable through Bankruptcy? I can imagine a lot of businesses are going to take the loans only to turn around and fail within 9 months anyway if unemployment doesn't drop below 8% before year end.

You have to sign a personal guarantee and pledge collateral like your home.

So, it's not a good plan to take out one of those loans unless you are pretty darn sure you can stay current.

The good news is that under the emergency plan, you have 1 year before you have to make a payment and as long as you maintain your employees, a good part of it can be forgivable.

[sooner88]

Question:

Are the SBA Loans going to be dischargeable through Bankruptcy? I can imagine a lot of businesses are going to take the loans only to turn around and fail within 9 months anyway if unemployment doesn't drop below 8% before year end.

There are two SBA options out there now:

1) SBA Economic Injury Disaster Loans (EIDL)

a. For this program, the Borrower works directly with the SBA and applies through their website. We’ve encouraged customers to at least apply, as the terms provided are very favorable.

2) CARES Act – SBA 7a
a. This is separate from the EIDL SBA program and is done through a SBA 7a loan which you can do directly through a bank. This option has the payroll component that will likely be forgiven. Guidance has not been finalized as there are still outstanding questions that will be clarified more by the SBA shortly.

We're encouraging all customers to apply, but emphasizing that this is still a loan with collateral, guarantees, etc. There is a lot of misinformation out there, where people have assumed all debt will be forgiven which does not seem to be the case, just the payroll component. Either way, the terms are very favorable, with majority of the EIDL being priced at 3.75% fixed, 1 year deferment and 30 year amortization.

[jerrywall]

I got an email from my lawyer with this line in regards to the CARES act SBA 7a

Loans will have a 100% SBA guaranty and will be unsecured with no personal guaranties required.

Is this incorrect?

[Pete]

I got an email from my lawyer with this line in regards to the CARES act SBA 7a



Is this incorrect?

That is for the smaller loan... Basically limited to 2.5X your monthly payroll costs.

[sooner88]

That is for the smaller loan... Basically limited to 2.5X your monthly payroll costs.

Pete's correct. While there hasn't been official guidance placed, the overall structure is relatively solidified. Below is an excerpt from what we sent to our existing customers:

The PPP program will provide loans from a bank or credit union that will be 100% guaranteed by the SBA. The loans will not require personal guarantees, will be unsecured, and the SBA will be waiving its typical guarantee and other fees associated with their lending program. The loans are available to all employers of a certain size (typically 500 employees or less though there are some variables that may allow larger companies into the program), including sole proprietors, independent contractors, and self-employed persons.

Current information seems to indicate that the loan amounts will be based on 2 ½ X the average monthly payroll of a company, including vacation and other types of paid time off, health care benefits, and retirement benefits. The loan amount is reduced by any amount over $100,000 paid to any employee.

The funds can be used for payroll, healthcare costs, mortgage interest, and interest on debt that was in place prior to February 15, 2020. All or a portion of these loans can be forgiven to the extent the funds were used for payroll (and certain other) costs incurred during the 8-week period after the loan was made. The amount forgiven can be reduced if the number of full-time equivalent employees is reduced after the loan is granted.

[Plutonic Panda]

Incorrect.

https://www.natenals.com/

wow that is amazing news! I had seen this story spread around by several different media outlets! Never thought to check their own website lol. Thanks for this information.

[gopokes88]

As far as behaviors changing and reduced capacity becoming a new norm for a while... Rumblings are that Disney doesn't expect to reopen until at least June 1, but even then, will likely reopen only one or two parks, possibly at only 50% capacity, no theater shows, very limited restaurants.

Think of it this way: A corporate monster like Dis ey is literally losing millions of dollars every day this goes on. If it goes on much longer, there's a very real chance they could be looking at *bankruptcy*. Think about that.

Then, from that perspective, if a behemoth like Disney could be in trouble, a small business/restaurant owner's problems suddenly become a lot more vivid.

We got take out from Teds over the weekend. They seemed very busy and it took several calls to get in and place an order. Their online ordering system was broken. Teds has fallen off our radar a bit in the last few years, but surely I don't want to see them gone. Hoping they can figure out a way to survive.

Bigger companies have bigger expenses to cover. Revenue has gone to near 0 for so many industries size can't weather this storm.

[gopokes88]

Pete's correct. While there hasn't been official guidance placed, the overall structure is relatively solidified. Below is an excerpt from what we sent to our existing customers:

The PPP program will provide loans from a bank or credit union that will be 100% guaranteed by the SBA. The loans will not require personal guarantees, will be unsecured, and the SBA will be waiving its typical guarantee and other fees associated with their lending program. The loans are available to all employers of a certain size (typically 500 employees or less though there are some variables that may allow larger companies into the program), including sole proprietors, independent contractors, and self-employed persons.

Current information seems to indicate that the loan amounts will be based on 2 ½ X the average monthly payroll of a company, including vacation and other types of paid time off, health care benefits, and retirement benefits. The loan amount is reduced by any amount over $100,000 paid to any employee.

The funds can be used for payroll, healthcare costs, mortgage interest, and interest on debt that was in place prior to February 15, 2020. All or a portion of these loans can be forgiven to the extent the funds were used for payroll (and certain other) costs incurred during the 8-week period after the loan was made. The amount forgiven can be reduced if the number of full-time equivalent employees is reduced after the loan is granted.

This aligns with everything we've been told. It's a lifeline if things get going by mid-may-ish. If not, a massive wave of bankruptcies is coming.

Think like an owner not an employee.

Employee's see- WOW 2.5X payroll that can be forgiven, awesome
Owner's see- 5 weeks of Oxygen if things aren't rolling by then, just delayed the inevitable

[bluedogok]

At the end of February we had decided to come down last weekend for my father's 83rd birthday and of course hit our favorite spots while we were down there. Of course that didn't happen, we stayed in Denver.

All I know is when things get (somewhat) back to normal we plan on coming down and hitting our favorites that we can. I'm not that concerned about getting back into group settings even though I am immune compromised and on immunosupressants from my liver transplant two years ago today. We still need to live our lives as full as we can and that is pretty much what the economy is reliant on. The ripple effect is huge.

[jn1780]

This aligns with everything we've been told. It's a lifeline if things get going by mid-may-ish. If not, a massive wave of bankruptcies is coming.

Think like an owner not an employee.

Employee's see- WOW 2.5X payroll that can be forgiven, awesome
Owner's see- 5 weeks of Oxygen if things aren't rolling by then, just delayed the inevitable

Yeah, even when they can reopen, A lot of businesses are going to struggle to survive during The Great Corona Hangover.

[sooner88]

Yeah, even when they can reopen, A lot of businesses are going to struggle to survive during The Great Corona Hangover.

SBA 7a program is certainly temporary relief. EIDL is more long-term working capital. Either way, the economic impact this will have on the city, state, country is difficult to comprehend and unprecedented. I imagine that there will be additional relief coming if this continues.

[jn1780]

SBA 7a program is certainly temporary relief. EIDL is more long-term working capital. Either way, the economic impact this will have on the city, state, country is difficult to comprehend and unprecedented. I imagine that there will be additional relief coming if this continues.

I'm sure there will be trillions more given out. It will be tough to get money flowing again. Everyone is going to be super tight with money going forward though.

[Teo9969]

SBA 7a program is certainly temporary relief. EIDL is more long-term working capital. Either way, the economic impact this will have on the city, state, country is difficult to comprehend and unprecedented. I imagine that there will be additional relief coming if this continues.

Worldwide. That's one of the most substantial problems here: so much of what has caused the economic explosion over the last 20+ years has been the increase in efficiencies from the global economy. Countries are going to be so focused on just getting their bearings after this that the idea of capital returning to global trade is going to take some serious time and more importantly, faith.

[chuck5815]

I'm sure there will be trillions more given out. It will be tough to get money flowing again. Everyone is going to be super tight with money going forward though.

i've been tight as **** for years, and I've been telling everyone I know that they shouldn't be wasting their hard earned cash on $90 fajitas at Uncle Julio's in Chisholm Creek. But their Instagram pictures by the impoundment pond were great, and they ended up with a lot more Insta followers than me. So there is that.