DALLAS (WBAP/KLIF)- Congress unveiled a $900 billion bill to provide short-term economic relief to families and businesses that have been devastated by COVID-19. The plan includes several items that will help restaurants, including a second round of forgivable loans through the Paycheck Protection Program (PPP). Critically, Congress recognized that restaurants continue to endure unparalleled job and revenue losses during this pandemic and included specialized provisions in the bill to assist the restaurant industry.
“Since March 19, 2020, when restaurants were shut down by the pandemic, the Texas Restaurant Association (TRA) has worked with the National Restaurant Association to press Congress and the Trump Administration for both long-term and short-term economic support that would work for our entire industry,” said Emily Williams Knight, Ed.D., President and CEO of TRA. “With more than 10,000 restaurants already closed for good, we could not afford to wait any longer. I’m grateful that Congress worked in a bipartisan fashion to provide relief that will help thousands of small businesses remain open, keep employees on payroll, and feed their communities. This is the lifeline restaurants needed at a critical juncture in our long-term road to recovery.”
“The new stimulus bill provides some much needed breathing room for restaurants like ours that have been hit hard by the pandemic,” said Eric Silverstein, Owner of The Peached Tortilla in Austin. “While we continue to meet our obligations including rent, payroll, utilities, etc… this has been an extraordinarily difficult nine months for our business. We have been forced to pivot, re-pivot, and adapt to the ever-changing business environment. The new PPP loan terms float us a lifeline for this winter, when outdoor dining has been limited and general dine in business has decreased. I also think the enhanced unemployment benefits and stimulus payments will greatly help those in our industry who are presently out of work.”
“As independent restaurant owners in a community heavily affected by the pandemic, we are relieved for this action from Congress,” said Chef Larry Delgado, Co-Owner of the Delgado Collective, which includes three restaurant concepts in McAllen, Texas.
“We continue to do everything creative we can to keep people working and fed,” said Jessica Delgado Co-Owner of the Delgado Collective. “We consider this bill a step in the right direction to help small businesses like ours.”
“It’s no secret that 2020 has been a challenging year for all of us,” said Larisa Ruiz, Office Manager at Bugatti Ristorante in Dallas. “Here at Bugatti we pride ourselves in being ‘good sports’ and looking on the bright side no matter what. Yet 2020 has truly put all of us to the test, and at times the challenge seemed too big to tackle. We will continue to fight for our wonderful staff and for our beautiful restaurant which has created a lifetime of memories for so many of our guests. We’re hopeful this round of relief will help us get back to entertaining our guests, pouring drinks, serving delicious Italian food, singing “Happy Birthday” songs and celebrating rehearsal dinners at Bugatti’s.”
The plan announced today provides targeted 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. Importantly, most of this money must be invested in payroll for a loan to be forgiven, ensuring employees receive some of the help they need and deserve.
Enhanced Access to PPP: Many restaurants within mid-sized and larger restaurant groups are on the verge of bankruptcy, which would trigger devastating layoffs and damage the food supply chain. Recognizing that these businesses need access to capital too, today’s bipartisan plan allows these restaurants to participate in the PPP if they meet revenue loss requirements and do not employ more than 300 employees at a given location.
Other provisions in the bill that will benefit restaurants include the deductibility of business expenses paid with PPP loans, something the TRA worked directly with Senator Cornyn to address. This fix was critical to avoid surprise tax bills that would have essentially charged taxes on a restaurant’s PPP loan. The bill also helps restaurants by enhancing the Employee Retention Tax Credit (ERTC), extending the augmented Work Opportunity Tax Credit (WOTC), and increasing the tax deduction for business meals.
“Congress’ action today will keep tens of thousands of restaurants from closing in the coming months,” said Knight. “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. Still, the long-term economic challenges facing independent, franchise, and chain restaurants will not end with the new year, and so we will continue to press federal and state leaders for the additional support restaurants need to rebuild stronger than ever.”
The TRA hosted a webinar to walkthrough the relief bill and what it means for Texas Restaurants:
