Today, Congress unveiled a $900 billion relief bill to provide short-term economic relief to the country in the face of the coronavirus pandemic. The plan includes several items that will benefit restaurants, most importantly a second round of access to the Paycheck Protection Program (PPP), with unique provisions aimed to assist the restaurant industry, which continues to endure unparalleled job and revenue losses. From the day the industry was shut down by the pandemic, the National Restaurant Association has pressed Congress and the Trump Administration for both long-term and short-term economic support for the restaurant industry, including tailored changes to make PPP a more effective tool for struggling restaurants.
This plan targets restaurant relief with the following provisions:
- Enhanced PPP Loan Size: The PPP provides a business with a forgivable loan based on 2.5 times its monthly payroll costs. Restaurants, however, can seek forgivable loans based on 3.5 times monthly payroll costs.
- Enhanced Access to PPP: Companies that employ a total of 300 or more employees at all locations (combined) are deemed ineligible for the PPP. Today’s bipartisan plan reflects the reality that many mid-sized and larger restaurant groups are on the verge of bankruptcy and allows restaurants to qualify for PPP as long as they do not employ more than 300 employees at each physical location.
The National Restaurant Association sought other provisions that were included in the bill which will benefit restaurants, including the deductibility of business expenses paid with PPP loans, enhancement of the Employee Retention Tax Credit (ERTC), extension of the augmented Work Opportunity Tax Credit (WOTC), and increased tax deduction for business meals.
“The action taken by Congress today will keep tens of thousands of restaurants from closing in the coming months,” said Tom Bené, President & CEO of the National Restaurant Association. “A second round of PPP, combined with unique enhancements for the restaurant sector, will provide critical access to capital. Restaurant operators and their employees are dedicated to serving their communities, and today’s bipartisan agreement will give them the opportunity to do that through the holidays. However, the long-term economic challenges facing independent, franchise, and chain restaurants will not end with the new year, and we will continue to press federal and state leaders for the support that will put us on the road to recovery.”
“Restaurants have waited months for a comprehensive relief bill that reflects the magnitude of this crisis,” said Sean Kennedy, Executive Vice President of Public Affairs for the Association. “Today’s bipartisan action is a ‘down payment’ that recognizes the unique damage the pandemic is inflicting on our industry. Congress heard from us and hundreds of thousands of our restaurant members about basic steps to improve PPP for our industry—and they listened. We appreciate Senate and House Leadership, key committee chairs and ranking members, and the group of moderates, each of whom played a critical role in this process. There is much more to be accomplished, and we will continue to press in 2021 at the federal, state, and local level on behalf of the industry, our employees, and our customers.”