The Restaurant Sector : SA Franchise Warehouse now to focus on Covid rescue loans in this sector

The sit down restaurant industry is clearly hardest hit by the Covid pandemic and needs assistance now at the speed of light if we were to see our favourite brands back in action the way they were.

There is no question that the ban on alcohol as well as the curfew had a massive impact on cash flow and left restaurant owners with an almost impossible mission to recover.

Levels of working capital are smashed and landlords are generally hugely unsympathetic towards restaurant owners. They may tolerate extended payments at most but are generally reluctant to write off any rent, which just makes the recovery task so much harder.

With the curfew largely being lifted, it is at least now possible for restaurant owners to try their hand at projecting cash flow for the way forward, albeit still not at ful capacity.

SA Franchise Warehouse has been facilitating Covid rescue loans for the last few months with almost 100% success. Most banks have ironed out their internal processes and addressed problems causing delayed approval and payouts. As with any funding application, there are always a couple of technical aspects which need to be anticipated and processed.

Based on our engagement with the different commercial banks, the reason for declines mainly relate to the presentation of the business case. Applications need to demonstrate that the business has exhausted all alternative sources of funding and would not be able to sustain itself without the rescue funding line.

On the same spreadsheet, the ability of the business to afford additional debt repayments, without compromising liquidity, must be illustrated.

Careful consideration needs to be given to all assumptions to pitch a realistic case, which needs to tie up with pre Covid information as far as possible. How to articulate the business case and compiling the application pack with the best chance of success have been the focus of SA Franchise Warehouse during the last couple of months.

We invite you to engage with us on the possibility of a government guaranteed Covid loan at 7% over 6 years through your own commercial bank.

To read more on how the scheme works and how SA Franchise Warehouse can contribute to maximize loan amounts and likelihood of approval, please follow this link - https://www.safw.co.za/covid-19-loans