Sask. restaurant facing possible bankruptcy as pandemic loan payments approach

Miren Elordi is determined to keep her restaurant afloat, despite the potential for bankruptcy looming over her.

Elordi used her savings to fulfil her lifelong dream of owning a business when she opened a Press’d Sandwich Shop franchise on Scarth Street in Regina in 2019.

The pandemic hit a year later. Elordi said she’s been struggling to make ends meet ever since.

“We’re just trying to survive every month,” she said. “More than two years has been a loss for us.”

Like many other businesses, Elordi took out a Canadian emergency business account (CEBA) loan. The loans were given out to help businesses impacted by the pandemic. 

Elordi got $60,000, and has to pay back $40,000 after some loan forgiveness. 

CEBA loan repayments are scheduled to begin on Jan. 18. Elordi said she can’t afford them.

“What we’re earning right now, it’s almost enough for monthly expenses,” said Elordi. “January and February are always low — we’re expecting half of what we’re earning right now — and it’s probably a loss again if I add more expenses.”

Elordi is working on getting a new loan from a bank to help with all of the costs.

“My accountant is actually asking me, ‘do you want to file for bankruptcy?'” she said.

Elordi said she wants keep her business going and is working hard to do so. 

“It’s my first business. I don’t want to give up just like that.”

She has raised prices and stated catering, which she hopes will boost sales this holiday season. She has also switched suppliers to reduce food costs.

She said she doesn’t want to close her doors, but her patience is wearing thin.

“This is not what I dreamed of, this is not what I pictured for having a business,”  Elordi sighed. “It’s been too long already, I don’t know if I can continue doing this. I just hope for the best, that’s all I have.”

Jim Bence, the president and CEO of Hospitality Saskatchewan, agreed that times are tough for businesses in the province.

“This is probably the most pressure we’ve seen on organizations since the pandemic, and even during the pandemic there were some relief measures that came out,” said Bence. “We incurred a lot of debt in the restaurant industry.”

Bence said the federal government could help local businesses by extending the loan repayment period. 

In Saskatchewan, 29,088 businesses were approved for CEBA loans. According to projections by the Canadian Federation of Independent Business, a quarter of a million businesses Canada-wide may be at risk of closure after the end of 2023.

“One of the silver linings of the pandemic for our industry, for consumers in general, really was that shop local attitude,” Bence said. “We discovered things about our own communities that we didn’t necessarily know before.”

Christie Peters, owner and executive chef of Primal, a pasta restaurant, and Pop Wine Bar in Saskatoon, said finding creative solutions to get people engaged with her restaurant during the pandemic was essential to her success.

“We did Skip the Dishes, takeout, we sold groceries, did online wine tasting and cocktail classes, cooking classes as well,” said Peters.

She said she tries to adapt to consumers’ needs. She plans on implementing healthier salads and mocktails in January to appeal to people working on their New Year’s resolutions.

Peters said that although she’s always tried to shop locally as much as possible, inflation has made supplies from elsewhere cost as much as local producers, so she now gets supplies almost entirely from Saskatchewan. She said that means her customers, in a way, are shopping local twice when they eat at her restaurant.

“The quality is higher and your dollar is staying within your local province,” said Peters. “So finding out which restaurants are serving local foods and supporting local farmers, that money is going to trickle back to the farmers and stay within Saskatchewan and make our economy just that much healthier.”

Like Elordi, Peters took out a CEBA loan for her two restaurants. She said she is confident she will be able to make the payments, but is worried for other restaurants in the province.