What is the significance of March 16, 2021, in relation to Black Bear Diner's PPP-SD loan?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
(22,819) | | Present value of lease liability | 557,925 | | Less: current portion of lease liability | (105,194) | | Lease liability, net of current portion | $ 452,731 | Litigation: The Company is subject to litigation and pending claims arising in the ordinary course of business. The Company records reserves for such matters when payment is probable, and the amount of a claim is reasonably estimable. The ultimate resolution of pending claims has not had and is not expected to have a material adverse effect on the Company's financial condition, position or cash flows at December 25, 2024 and December 27, 2023.
NOTE 6 - GOVERNMENT ASSISTANCE PROGRAMS
Paycheck Protection Forgivable Program Loans: As a result of the economic uncertainty stemming from the impact of the COVID-19 pandemic, on March 16, 2021, the Company received a Second-Draw Paycheck Protection Program (PPP-SD) loan in the principal amount of $1,124,900 from the SBA in accordance with the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act ("Economic Aid Act"). The PPP-SD loan has a stated interest rate of 1% per annum and has a contractual maturity date of March 1, 2026.
The Company has elected to account
Source: Item 23 — RECEIPT (FDD pages 56–243)
What This Means (2025 FDD)
According to Black Bear Diner's 2025 Franchise Disclosure Document, March 16, 2021, is the date the company received a Second-Draw Paycheck Protection Program (PPP-SD) loan. This loan, amounting to $1,124,900, was obtained from the SBA under the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act due to economic uncertainties caused by the COVID-19 pandemic. The PPP-SD loan carries an annual interest rate of 1% and has a contractual maturity date of March 1, 2026.
Black Bear Diner accounts for this PPP-SD loan as debt, initially recording the proceeds as long-term debt. The loan is subsequently recognized as other income when the SBA legally forgives the balance. During the year ending December 29, 2021, Black Bear Diner applied for forgiveness of the PPP-SD loan and received partial forgiveness of $999,509.
As of December 25, 2024, and December 27, 2023, the remaining outstanding balance of the PPP-SD loan is recorded as long-term debt, with the current portion reflected in current liabilities on the balance sheet. While Black Bear Diner believes they met the conditions for full forgiveness, the ultimate forgiveness depends on the SBA's concurrence that the economic uncertainty justified the loan request and that the proceeds were used for admissible expenses. If the company is found to have violated the Paycheck Protection Program's provisions, they may be required to repay the loan in full and/or face additional penalties.