Fast casual restaurant brand Potbelly closed on a new $25 million senior secured term loan that will mature on Feb. 7, 2028. Sagard, an alternative asset manager, led the term loan.

Potbelly used a portion of the proceeds of the term loan to retire an existing revolving credit facility with J.P. Morgan. It will use the remaining proceeds to fund working capital and for general corporate purposes, including capital expenditures. The facility also allows Potbelly to enter into an additional $5 million revolving credit facility with third-party lenders, subject to customary terms and conditions.

“Potbelly’s new five-year term loan replaces our short-term revolving credit facility and will provide the company with enhanced financial flexibility, which is particularly important as we execute against our five-pillar strategy and make additional progress towards our medium and long-term growth objectives,” Steve Cirulis, CFO of Potbelly, said. “We are excited to add Sagard as a lending partner and believe that completing this transaction in today’s challenging capital markets environment demonstrates the strength of Potbelly’s business.”

William Blair acted as the exclusive financial advisor to Potbelly on the transaction.