The restaurant industry is calling on Congress to make changes to the Paycheck Protection Program (PPP), as well as provide additional funding to help struggling businesses during the coronavirus pandemic.
The National Restaurant Association wrote to congressional leaders on Thursday asking for revised loan restrictions so restaurants can spend 50% or more of loans on non-salary expenses, up from the currently prescribed 25%.
The group also called for a flexible schedule for using the loans, including extending the eight-week period to use the loan and allowing restaurants to have at least 90 days from their full reopening to rehire employees.
“A growing number of restaurateurs are concluding that the PPP is not going to prevent them from permanently shutting down operations in local communities,” wrote Sean Kennedy, executive vice president of public affairs for the group.
The Senate and the administration are negotiate a deal provide an additional $ 250 billion to the $ 349 billion program that the Department of the Treasury and the Small Business Administration (SBA) deployed applications for the last week.
The letter also calls on businesses applying for loan forgiveness to be allowed to defer payroll taxes due this year over the next two years, loan forgiveness exemptions for restaurants that cannot retain employees, insurance that nonprofits can get loans, deferred tax payments, better 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 reduced in service – much longer than originally planned. Once “normal” operations resume, virtually every restaurant in this country, from the favorite restaurant to the local icon, will be a virtual startup in desperate need of money, ”Kennedy wrote.
Kenny called the impact on the industry “devastating” and said that in the first three weeks of the shutdown 3 million jobs were lost and 15% of American restaurants have closed permanently or are likely to shut down. do so over the next two weeks. The group predicts that revenue losses in March and April will be around $ 100 billion.
“The principle of PPP is an important first step for restaurants surviving this crisis, but there are warning signs that it is not providing the relief our industry desperately needs,” Kennedy wrote. “The PPP is funded at $ 349 billion, and we expect lenders to hit that cap shortly.”