METAIRIE, La. – 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.
“Since early March, when Louisiana restaurants were shut down by the pandemic, the Louisiana Restaurant Association partnered with the National Restaurant Association to press Congress and the Trump administration for both long-term and short-term economic support,” said Stan Harris, LRA President and CEO. “This bill will provide Louisiana restaurants with much needed capital, creating more time for us to work with Congress to develop additional programs to save our beloved community restaurants.”
The plan announced today targets restaurant relief with provisions including:
· 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.
Other provisions in the bill that will benefit restaurants include 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 and 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.”