What are the conditions for full forgiveness of the PPP-SD loan for Black Bear Diner?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
Under the terms of the Paycheck Protection Program, a PPP loan provides for conditional forgiveness if the Company utilizes the loan proceeds on admissible expenses, including qualifying payroll, rent, and utility expenses, and maintains employment and compensation levels for a specified period of time. Although the Company believes the conditions for full forgiveness of the PPP-SD loan have been met, ultimate forgiveness is conditioned upon the SBA concurring with the Company's good-faith assessment that the current economic uncertainty made the loan request necessary to support ongoing operations and the loan proceeds were used for admissible expenses. If the Company is later determined to have violated the provisions of the Paycheck Protection Program, the Company may be required to repay the PPP-SD loan in its entirety and/or be subject to additional penalties.
Source: Item 23 — RECEIPT (FDD pages 56–243)
What This Means (2025 FDD)
According to Black Bear Diner's 2025 Franchise Disclosure Document, the PPP-SD loan that the company received has conditions for forgiveness. The loan can be forgiven if Black Bear Diner uses the proceeds for admissible expenses, such as qualifying payroll, rent, and utility expenses. Additionally, the company must maintain employment and compensation levels for a specified period.
While Black Bear Diner believes it has met the conditions for full forgiveness of the PPP-SD loan, the ultimate decision rests with the SBA. The SBA must concur with Black Bear Diner's assessment that the economic uncertainty at the time made the loan request necessary to support ongoing operations and that the loan proceeds were indeed used for admissible expenses.
If it is later determined that Black Bear Diner violated the provisions of the Paycheck Protection Program, the company may be required to repay the PPP-SD loan in its entirety and could be subject to additional penalties. As of December 27, 2023 and December 28, 2022, the remaining outstanding balance on the PPP-SD loan is recorded as long-term debt with the current portion reflected in current liabilities in the balance sheet.