The restaurant industry is calling on Congress to make changes to the Paycheck Protection Program (PPP), as well as provide further funding to help struggling businesses during the coronavirus pandemic.
National Restaurant Association wrote to congressional leaders on Thursday to ask for revised loan restrictions so that restaurants can spend 50 percent or more of the loans on nonpayroll expenses, as opposed to the 25 percent mandated currently.
The group also called for flexible timing to use loans, including extending the eight-week period to use the loan and allowing for restaurants to have at least 90 days from when they fully reopen to rehire employees.
“A growing number of restaurant owners are concluding that the PPP is not going to prevent them from permanently closing operations in local communities,” wrote Sean Kennedy, the group’s executive vice president of public affairs.
The Senate and administration are negotiating a deal to provide additional $250 billion to the $349 billion program that the Treasury Department and Small Business Administration (SBA) rolled out applications for last week.
The letter also calls for businesses seeking loan forgiveness to be allowed to defer payroll taxes owed this year to over the next two years, exemptions from loan forgiveness reductions for restaurants that cannot retain their employees, assurance that nonprofits can get loans, deferral of tax payments, more access to disaster loans and improvements to the employee retention tax credit.
“The severity of this pandemic has made it clear that restaurants will remain closed – or severely curtailed in service – for far longer than originally anticipated. Once ‘normal’ operations resume, virtually every restaurant in this country, from the favorite diner to the local icon, will be a virtual startup in desperate need of cash,” Kennedy wrote.
Kenny called the impact on the industry “devastating” and said in the first three weeks of the shutdown, 3 million jobs have been lost and 15 percent of U.S. restaurants have permanently closed or are likely to in the next two weeks. The group projects that March and April revenue losses will be around $100 billion.
“The premise of the PPP is an important first step for restaurants surviving this crisis, but there are warning signs that it is not providing the relief that is so desperately needed for our industry,” Kennedy wrote. “The PPP is funded at $349 billion, and we expect that lenders will reach that ceiling shortly.”
Source: Thanks https://thehill.com/business-a-lobbying/business-a-lobbying/492031-restaurant-industry-calls-for-changes-to-small