During times of uncertainty, we often find ourselves standing in the center of the unknown wondering what our next step should be. We have compiled a list of tips to help you plot your course during these uncertain days.
Disaster Relief Loans
Check with your state and local government to see if disaster loan programs are available. The U.S. Small Business Administration (SBA) loan program offers restaurants struggling from the financial crisis the opportunity to get low-interest loans up to $2 million to cover payroll and other expenses. These loans come with no payment for up to a year but are expected to take nearly a month to be approved and closed on. If that lag time is problematic, reach out to your bank to discuss a bridge loan opportunity. Bridge loans are intended to keep your restaurant afloat until the SBA loan financial packages are received and the bank can be paid back.
You can also check for tax filing relief options with the possibility of filing sales tax returns without payment (but note that a risk penalty could be assessed if your state does not allow deferral).
In the meantime, to help boost sales, here are some helpful tips to keep customers engaged:
- Offer gift cards at a discounted rate
- Tailor your menu to “top customer favorites” or develop a menu for easier delivery & take-out
- Offer discounts or scale back on menu prices
- Consider a grocery or market concept; option of offering daily food baskets; look at creating prepared meals for families
There are also some additional options to research to help alleviate the growing strain of expenses. Here are just a few to consider:
- Discuss with your landlord the ability to reduce/eliminate rent for the next two months
- Delay your utility bill
- Research if your state has a liquor return or buyback program
- Debt covenant requirements -reach out to your lender to obtain an extension on audit or review requirements
- Your insurance carrier will be very valuable in helping to understand your coverage, discuss the impact of providing your own delivery services, the closing of restaurants, reductions in premiums and potential refunds due to less staffing, less claims, and less concerns with no dine-in.
- Partner with third-party delivery companies and compromise about offering “no fee delivery” or reduced fees
- Evaluate your prepaid accounts - are there certain things you can pay for monthly vs. multiple months at a time? Is it possible to get partial refund on some prepaid items and just make payments monthly?
- Franchisees – have a conversation with your franchisor regarding the delay of payment
We hope that the tips and ideas outlined above will help you and your restaurant during the COVID-19 crisis. As always, HHM is behind you and we will support you in any way we can.