Independently owned restaurants are blasting the passage of a bipartisan bill that would replenish funds to a program designed to keep small businesses from shuttering amid the nation's coronavirus pandemic, arguing it does not make the "fixes" their industry desperately needs.
The $484 billion relief bill, which passed the Senate on Tuesday, would inject $320 billion into the Paycheck Protection Program, which was halted last week after it ran out of money. That includes $60 billion for community-based lenders, smaller banks and credit unions to assist smaller businesses that don't have established relationships with big banks and had a harder time accessing the funds in the first round of loans.
But the Independent Restaurant Coalition – which represents chefs and owners of small, non-chain restaurants – has lobbied for policy changes to restrictions around how the loans are used and the timeline in which the money must be spent. They say the rules don't work for businesses that still aren't sure when customers will return.
The PPP, which was created with approval of the original CARES Act last month, allows businesses smaller than 500 employees, including restaurants, to apply for financial loans during the pandemic to help keep them from closing completely.
To have the loans completely forgiven, businesses are required to spend 75% of the federal money on payroll and 25% on fixed expenses such as rent, utilities and other bills. A business must start spending the money 10 days after getting approved, and they have eight weeks until the loan expires.
But restaurants say these are unreasonable mandates while many are closed and not accumulating normal business expenses – and could remain closed for months, well past the expiration date.
Restaurateurs want the loan extended from eight weeks to three months after they open, noting business will probably be slow even when they open their doors again, as people remain reluctant to re-congregate until there's a COVID-19 vaccine. They want the origination date of the loan to be when they can legally reopen fully, not within 10 days of receipt. They've asked that the period to replay loans be lengthened from two years to 10 years.
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I have created a list of Newtown Township/Borough restaurants/eateries that are OPEN for business even if it's for limited service such as curbside pickup on certain days for limited hours. Find the list here: https://bit.ly/OpenRestuarantsCOVID19