More than 110,000 restaurants have closed permanently or long-term across the country as the industry grapples with the devastating impact of the Covid-19 pandemic. And more pain is ahead, as more cities such as New York City have closed indoor dining just as the temperatures drop.
The nationwide tally — representing one in six U.S. eateries — is among the findings in a recent survey by the National Restaurant Association (NRA).
As people continue to stay and eat at home and new indoor dining bans emerge across the country, restaurateurs have struggled to keep up sales, with many of the hardest-hit areas in states such as New York and Illinois. Almost 90% of full-service restaurants in the survey reported declines, with revenue falling 36% on average.
Though the NRA was lobbying for more aid, they are pleased that Congress passed a $900 billion relief bill that includes a second round of access to the Paycheck Protection Program (PPP) with unique provisions to assist the restaurant industry.
According to the NRA, provisions in the new bill that will benefit restaurants include:
- PPP second draw – 100% forgivable loan.
- Restaurants can access 3.5x payroll – other businesses remain at 2.5x.
- Greater flexibility in accepted uses of PPP loans – including inventory costs.
- Expanded Employee Retention Tax Credits (ERTC).
- Long-term extension of Work Opportunity Tax Credit (WOTC).
- Business meal deduction expanded to 100% for next two years.
- Enhancements to other critical SBA lending programs.
The link below will take you to a document created by the NDA that provides valuable insights into the Covid-relief bill provisions that will directly benefit restaurants and their employees.
By Mark Friedlich, Esq., CPA.