Last night, Congress passed a new COVID-19 relief package that includes an increase to Paycheck Protection Program (PPP) funding for our industry, providing a short bridge for independent restaurants and bars to make it to 2021. Key changes that were made to the program were ones our coalition fought for — including expanding applicable costs for PPP to include PPE and supplies, as well as providing new ways for small businesses to access loans through CDFIs rather than banks. This is a direct result of our hard work and something we should all be proud of.
The restaurant and hospitality industries may receive loans of up to 3.5X average monthly payroll costs, compared to 2.5X for other industries.
The new PPP also has an expanded list of eligible expenses, including:
Mortgage, rent, and utility payments
Property damage costs
Worker protection expenditures
There are a few set-asides intended to help smaller, independent businesses including a $15B PPP set-aside for lending through CDFIs and other community-based lenders that will help expand access, and for very small businesses of 10 or fewer employees.
Operators can use the funds for any period between 8 and 24 weeks.
For loans less than $150,000, a business may submit a certification attesting that the entity meets the revenue loss requirements on or before the date the entity submits their loan forgiveness application.
The bill permits certain EIDL borrowers to also apply for a PPP loan.
New rules exclude publicly traded companies from PPP eligibility.
The proposal ensures applicants cannot be held liable if they didn’t understand they had recourse against them at the time they took the PPP and EIDL loans after a refinancing.
As we’ve said of the program before, the revised PPP will help the businesses who can access it, but we know it’s not a long-term solution to keep our doors open and fully employ our teams in 2021. That’s why we’ll continue our fight for the RESTAURANTS Act until independent restaurants, bars, and workers have the relief we need.
Thank you again for the hours you’ve spent calling Congress, emailing your lawmakers, and mobilizing your friends, colleagues, and loved ones. We’ll pick up right where we left off, fighting to save restaurants, after the new year.
The IRC Team
P.S. Have a question about what this new bill means for your business? Ask it here. We’re working with the James Beard Foundation on a webinar to help operators understand and navigate the updates to PPP, whether you’re applying for the first time or looking for a second round. We will do our best to address as many of your questions as possible.
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