How SF Monk’s Kettle Beer Bar Avoided Just-In-Time Bankruptcy With A PPP Loan


When the Paycheck Protection Program started receiving loan applications on April 3, its promise was something most restaurants and bars were looking for: a lifeline in the midst of the coronavirus pandemic and a chance to pursue the dream. to own your own small business.

Like many others in San Francisco, Monk’s Kettle owners Nat Cutler and Christian Albertson applied for the PPP loan as well as the Economic Disaster Loan (EIDL) as they tried every means to keep their business going. afloat.

Forced to downsize its staff to a small team of Cutler, Albertson and Chef Rachael Zavala, the group cut all non-essential costs. They took a full look at a delivery model they had started a few years earlier and emptied the cellar of its rarer inventory for some sort of clearance sale – that was all they could do to survive.


“Because we’re a beer bar that really focuses on having a lot of crazy, esoteric, and older, vintage stuff, we had built a much sought-after inventory cellar,” Cutler said. “And so we thought, ‘Well, if there’s a time to get rid of this stuff, it’s now'”

Through the sale, Monk’s Kettle was able to lean on a certain cushion, while continuing to generate modest income through take-out orders. Despite this, they knew the writing was on the wall.


“We’ve come up with a model that could take us until May, before it’s like, ‘If we don’t get help, it’s going to make a big difference,’” Cutler said.

But when the $ 349 billion PPP dried up on April 16 and it looked like only companies like Ruth’s Chris Steak House and Shake Shack received coveted loans, there was an uproar. At the time, small business owners expressed concerns about who would get the loans, with many feeling left in the dark by the government, as apparently only publicly traded restaurants were receiving the money. intended for small businesses. (It should be noted that Ruth’s Chris and Shake Shack have since paid off their loans.)

Then there was Monk’s kettle. Cutler, with the advice of their banker at the Bank of San Francisco, gathered the documents for both loans.

Just two hours after their bank submitted the PPP loan application, Cutler said, they were approved – a day before the news of the funds was depleted.

“I cried,” Cutler said of the news. “I was just like, ‘I can’t believe this.’ P3 doesn’t take you out of the woods knowing how long it can all last, but it certainly gives you a much better chance of getting out of it, especially because we’re open and generating income.

The San Francisco Bar had managed to score the PPP loan in the first round, submitting its documents a week after opening the initial filing. After Cutler and Albertson electronically signed the loan documents, the money was in the bank within 48 hours.

“It felt like we were under, I don’t know, a special moon or something,” Cutler said. “It was as if there were other forces at work that had nothing to do with us or with them or with anything. It was just like the gods are shining on us today and I don’t know why, but I’ll take it.

Yet they were the only ones among their circle of restaurant and bar-restaurant friends to have benefited from the loan.

“I feel lucky,” Cutler said. “I don’t feel like we don’t deserve it. I feel like we worked really hard to get [the loan], but it hurts to know that there are so many others who are equally deserving who have only done the right things and still don’t get them. They could be just as bright as a star, or even brighter than us, and they might not have gotten it due to random circumstances.

“I think it also comes down to: who is your bank? What relationship do you have with them? Can they speed up the processing of your application due to their clientele configuration and their relationship with you? “

Cutler has been in contact with their bank from the start of the shutdown. He worked closely with their banker not only to submit the loan documents, but also to think about the business down the line by creating a short term plan, a medium term plan, and a long term plan. Cutler thanked the Bank of San Francisco for working to quickly collect information for the loan application and get it in the correct format for submission to the Small Business Association.

But even with the lifeline of the PPP loan comes a whole new set of challenges. Monk’s Kettle requested and received an amount equivalent to 250% of his monthly payroll. The loan can be canceled if 75% is spent on employees, but its usefulness can be tricky at a time when most restaurants are in a take-out model or completely shut down.

“For restaurants in particular, P3 isn’t a very friendly loan, especially if you’re not open,” Cutler said. “You have to pay it back in two years. If you do not use it for its intended purpose, it is not forgiven.

“So other than rent and utilities it doesn’t help you other than working capital you have to pay back in two years which, given the climate, how are you going to generate enough income and cash? to pay it off in two years? “

Cutler had preferred the EIDL to the PPP loan because the conditions are much more friendly. There is more flexibility with using EIDL, and although much of it cannot be forgiven – there is a $ 10,000 grant that can be requested and canceled – the loan will come with a interest rate of 3.75% for small businesses with a maximum repayment term of 30 years, which is essential when faced with the demand for reimbursement from PPP in two years.

Still, a lifeline is a lifeline, and Cutler is grateful. Although they have already rehired two front-of-house employees and four back-of-house employees since the shutdown, with the PPP loan they were able to rehire 15 full-time employees until mid-June. Monk’s Kettle is now in a much better position thanks to the loan; if they had not received it, they most likely should have closed in June.

“Honestly, if no help ever came,” Cutler said, “I don’t see how bankruptcy wouldn’t be inevitable, I just don’t see it.”

Dianne de Guzman is a digital editor at SFGATE. Email: [email protected]

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