Raleigh, Durham, Charlotte and other North Carolina cities had developed vibrant downtowns with the help of a wave of creative and ambitious new restaurants.
But to survive during the pandemic, these restaurants will need the support of their customers more than ever when some are closed or operating at reduced capacity.
Some foodies do their part by ordering takeout and generously tipping. There are online fundraisers. But a broader and more organized effort is needed to save them.
In Raleigh, one man spearheads such an effort by offering the city’s beleaguered restaurants loans with terms that look like they were written by Santa Claus: less than 1% interest and no payments for seven years.
The man, who was very successful with a communications technology company Triangle, asked me not to name him. “I don’t want it to be about me,” he said. “I want it to be about Raleigh and a way Raleigh is coming together in uncertain times.”
So far, he has issued a dozen loans worth over half a million dollars. He made a loan of $75,000 on Monday and a loan of $100,000 on Tuesday. There is no loan request. He has a 30 minute chat with the owner of the restaurant, checks their status with their landlord and creditors, and decides to make a loan.
If a recipient cannot repay the loan after seven years, this is unlikely to be a problem. “Any lender who is willing to lend money on these terms is unlikely to be hostile to nonpayment,” he said.
A restaurant owner sent her a thank you note that read, “Your nurturing hand during this difficult time will likely make the difference between success and failure for those you touch.”
His generosity is impressive, but barely sufficient. Restaurant culture depends not only on the skills of chefs, but also on the support of diners. If restaurants are to survive, they will need the help of their communities.
In the San Francisco Bay Area, Mark Zuckerberg and his wife, Priscilla Chan, donated $100,000 each to eight of their favorite restaurants. Wealthy North Carolina clients could do the same. The private money could be pooled into a loan fund on the model of what the anonymous lender does alone.
The Raleigh lender said it chose to give the money in the form of loans rather than gifts because a gift would create tax liabilities for restaurateurs and could jeopardize arrangements they have made with their creditors during the closure. He hopes that others will follow his initiative.
I spoke with a chief owner who received one of the loans. She said it was vital, as some expenses continue even though her home is closed. Federal government assistance for small businesses has been running out quickly, she said, and bank loan applications can take weeks and can be turned down.
“It’s been so difficult to get meaningful financial support,” she said. “Being able to talk to him and in 24 or 48 hours get a loan is a dream.”
Many are suffering financially during the shutdown, but restaurants in particular. Those with resources would do well to put some of their good fortune into good food and the local culture it sustains.
“Restaurants have been a really pivotal part of the evolution of Raleigh,” the lender said. “We need to do everything we can as a community to maintain that level of energy that we’ve all enjoyed and benefited from.”
At some point, North Carolina will reopen its economy, but unless those who can supply act now, some restaurants could be closed permanently. To avoid this loss, you will need diners who are ready to serve.
Those interested in making or requesting a restaurant loan can write to: [email protected]
Barnett: 919-829-4512, [email protected]
This story was originally published May 13, 2020 3:48 p.m.