3 minute read
Strategic allocation of disaster relief funds helps Dandelion Café owner keep doors open
By: Angel Rodriguez
In the best of times, owning and operating a restaurant can be an uphill battle, a daunting task, a labor of love – that often – is more labor than love. For many businesses in the leisure and hospitality sector, the worst of times came when the pandemic brought the economy to a standstill and businesses, especially restaurants and bars, were forced to pause or close permanently.
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In May 2020, employment in the leisure and hospitality sector was down 41 percent, a sharp decline compared to other sectors that ranged from 2 to 18 percent declines, according to the U.S. Small Business Administration (SBA) Office of Advocacy. Restaurants and bars, which make up the largest category of the leisure and hospitality sector, sought assistance from the SBA’s Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL).
Sarah Lieberman owns and operates Dandelion Café, a Houston coffee shop and restaurant that has about 15 employees. Lieberman has always had a passion for coffee and parlayed her personal experience in working at coffee shops into building a small business of her own. In early 2020, when the pandemic had just hit Texas, Dandelion Café benefited from Lieberman’s business savvy and due diligence after applying for and receiving funds from the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) offered by the SBA.
The PPP allowed Lieberman to keep her payroll cash flow, and she used part of the EIDL to help with kitchen renovations that were necessary for meeting the higher demand for takeout orders.
A year since the start of the pandemic, Dandelion Café has pivoted its operations by serving customers with curbside pickup, doorstep delivery and open-air dining. Socially distant dining is also available inside the restaurant.
LOCAL FAVORITE: Dandelion Café, 5405 Bellaire Blvd., is open seven days a week. Visit them on the web at dandelionhouston.com.
As a result of the ongoing pandemic, small businesses can still apply for the PPP and EIDL. The PPP is designed to assist business owners with payroll, rent, utilities, mortgage interest, personal protection equipment for employees and other qualified costs. This loan is calculated based on the applicant’s average monthly payroll; the loan recipient may be eligible for funds up to 2.5 times their average monthly payroll. Borrowers are eligible for full loan forgiveness, with the caveat that at least 60 percent of the proceeds are spent on payroll costs.
The EIDL is designed to assist small businesses pay off debts that were in existence before the disaster occurred, e.g., payroll, fixed debts, accounts payable and other expenses affected by the disaster. EIDL does not offer loan forgiveness, however, the terms are flexible with 30-year repayments and interest rates at 3.75 percent and 2.75 percent for small businesses, private and non-profit organizations, respectively.
Abigail Gonzalez, Economic Development Specialist with the SBA, advised small businesses to be prepared to provide information on average monthly payroll and carefully document all expenses utilizing the PPP funds, to successfully apply for PPP loan forgiveness.
said Gonzalez.
SERVICE IS KEY: Dandelion Cafe offers socially distant dine-in services.
FOR MORE INFORMATION, VISIT THE FOLLOWING:
Overview of Disaster Programs: www.sba.gov/disaster
Overview of First Draw PPP Loans: Paycheck Protection Program First Draw Loans: Overview (www.sba.gov)
Overview of Second Draw PPP Loans: Paycheck Protection Program Second Draw Loans: Overview (www.sba.gov)
List of PPP Lenders in Houston: PPP_Lenders_in_the_Houston_District_ in_2020_01-19-2021.pdf (www.sba.gov)
Resource Partner Contact Information (free business advising): Resource_ Partner_Contact_Information.png (www.sba.gov)
