The French Laundry got more than $2.4M in PPP funding; 17x more than average Bay Area restaurants
NAPA, Calif. (KGO) -- The luxury restaurant where Governor Gavin Newsom and San Francisco Mayor London Breed were notoriously spotted dining during a COVID-19 surge, reportedly received millions in PPP funding.
Yountville's highly acclaimed French Laundry received multiple loans through the Paycheck Protection Program, totaling more than $2.4 million, according to an ABC7 analysis of newly-released data from the Small Business Administration.
The French Laundry received two loans that were both approved on April 30, 2020. According to the SBA, the first loan was for more than $2.2 million to retain 163 employees. The second loan was for $194,656 to retain five employees.
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ABC7's analysis found the company received 17 times more than what the average Bay Area restaurant received.
"That's a lot of money. But, what can I do about it?" said Dennis Berkowitz, former owner of San Mateo restaurant Vault 164.
Berkowitz struggled to get around $318,000 to retain roughly 50 employees. The loan amount wasn't enough to sustain 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 fortunate," he said. "I really feel bad for the next generation of restaurateurs because they're screwed."
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The I-Team analyzed thousands of California loans released by the SBA that show wealthier, big businesses are often getting access to loans before small mom and pop owners. Out of all the approved loans in California, 91 percent of larger restaurants with 300 or more employees got their loan approved in April versus only 52 percent of smaller restaurants with 100 or fewer employees.
At the French Laundry, you can reserve an exclusive outdoor culinary dining experience starting at $450 per person or a White Truffle and Caviar dinner for $1,200 per person, according to reservation services online.
The company's website states the 1,600 square foot building is owned by celebrity chef Thomas Keller. Keller approached 60 investors to launch the restaurant back in 1994.
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ABC7 reached out to the French Laundry multiple times for comment and to confirm how many employees the company was able to keep on payroll for each loan. We have yet to hear back.
French Laundry is one of at least seven Bay Area restaurants with two or three Michelin stars that also received PPP loans, according to the SBA. The list of the other six restaurants include: Saison, Acquerello, Benu, Atelier, and Californios Restaurant Group.
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Val Cantu of Californios received around a $214,597 to retain 10 to 14 people.
"We're still trying to figure out how to spend it correctly," said Cantu. "Which has and continues to be cloudy."
Cantu told ABC7 the confusion stems from how frequent the SBA's rules were changing during the beginning of the process.
"Whether the PPP will be forgivable...we'll see, I'm not sure if it will be," he said.
Cantu admitted 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 Mission's La Palma, agreed. Although, like other family-owned small businesses, she didn't have in-house financial help.
"It was very intimidating, the application process," she said. "As soon as you look at it, you have questions. Anything you fill out wrong you are liable for."
Laurie Aaronson is a financial consultant serving hundreds of restaurants across the Bay Area. For the past seven months, she has focused on helping her clients qualify for PPP funding.
Laurie: "Clearly those who had established banking relationships with banks that chose to participate at least in the early stages...those who had access to financial advisors, accountants, and attorneys to make sense of the application received the loans."
Stephanie: "From your perspective, what needs to change to make access to funding more equitable?"
Laurie: "I think the Fintech companies are going to be key, because I think they leveled the playing field a lot in the late stages in the last round of PPP."
Fintech companies, or in other words, online banking companies, helped bridge the gap when bigger banks couldn't process a high volume of loans.
Kabbage is one example. More than 90 percent of the company's 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 around $28,000 - nearly four times less than the national average PPP loan size of $107,000.
"In the late stages in the second round of PPP many banks just shut their doors, Fintech companies stepped in and provided a lot of those loans," said Aaronson.
See all Bay Area companies that received loans in the table below:
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