The pandemic has had a significant economic impact on restaurants and bars as a result of mandated closures and ongoing challenges with respect to either a complete ban on indoor dining and/or differing rules for outdoor dining. Many restaurant owners are counting on the next round of economic stimulus payments and the Paycheck Protection Program to provide funds necessary for their very existence.
The National Restaurant Association (NRA) sent a letter to House and Senate leadership on Monday praising many components of the latest coronavirus response legislation and urging them to find bipartisan consensus on two issues that could have considerable impacts on the short- and long-term survival of the restaurant industry.
PPP has been a lifeline for many restaurants. The Senate HEALS Act proposes to allow small businesses with fewer than 300 employees who can demonstrate a 50% loss in quarterly gross receipts over the previous year to apply for a second round of PPP loans.
The NRA argues that at this threshold level, 55% of restaurants will not be eligible. In the letter they appeal for a 20% threshold, which would make 430,000 restaurant owners eligible for a needed second loan. The NRA states that such a change would ensure that restaurants with a low gross revenue loss, but still facing bankruptcy, would be eligible.
By Mark Friedlich, Esq., CPA.