Potbelly has its second $10 million PPP loan forgiven by SBA

When it arrived to federal pandemic aid, a 2nd bite of the apple paid off for Potbelly.

The Chicago-primarily based sandwich chain, which returned its initial $10 million Paycheck Security Program personal loan underneath pressure only to go back and get a second a person, was notified by the Modest Enterprise Administration final week that the fantastic $10 million harmony will be thoroughly forgiven.

Potbelly secured the next $10 million PPP personal loan in August 2020 and utilized for forgiveness very last calendar year. The SBA “manually reviewed” all PPP loans above $2 million to decide eligibility for forgiveness, according to the company. In March, Potbelly warned investors it could be accountable for paying out back again “all or a portion” of the five-yr be aware, based on the SBA’s perseverance.

On July 12, Potbelly been given notification from its lender, Harvest Tiny Business enterprise Finance, that the SBA accepted forgiveness of the total fantastic principal and accrued interest for a full of almost $10.2 million, in accordance to a Securities and Trade Fee submitting Friday.

A Potbelly spokesperson did not instantly return a ask for for remark Monday.

Released by the SBA at the onset of the COVID-19 pandemic in April 2020, the initial round of the PPP provided businesses with much less than 500 personnel forgivable financial loans of up to $10 million to go over eight months of payroll. The preliminary $349 billion in funding ran out in significantly less than two weeks, with many scaled-down businesses shut out, as banking institutions allegedly prioritized bigger shoppers in advance of mother-and-pop organizations.

That led to pushback from lawmakers and small-enterprise advocates, pressuring some bigger small businesses, which include publicly traded cafe chains these as Ruth’s Chris, Shake Shack and Potbelly, to give again their financial loans.

Demand from customers fell off during the 2nd round of PPP amid problems about financial loan forgiveness, and Potbelly decided to utilize once again in August 2020, as the plan was established to expire. The federal governing administration relaunched the application in January 2021 for a 3rd round of funding.

The SBA authorized 11.4 million loans truly worth just about $788 billion in the course of the a few rounds of PPP. As of July 10, the SBA has forgiven about 10.3 million loans really worth virtually $743 billion, or more than 94% of the complete PPP bank loan price.

Potbelly has developed from a solitary store on Lincoln Avenue in 1977 to a nationwide chain. As of December, Potbelly experienced about 5,500 employees operating 397 firm-owned outlets and 46 franchised places in 33 states. There are 111 organization-owned eating places in Illinois.

The business created $380 million in income past year, reporting a web loss of $23.8 million.

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