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Restaurants to Congress: We need more funding

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April 9, 2020

The National Restaurant Association told Congressional leaders Thursday morning that while the COVID-19 relief funds they passed are a vital tool to help restaurants bridge the crisis, they won't be enough.

"While COVID-19 funds are helping many businesses and employees across the country, there is no escaping that a growing number of restaurant owners feel that the PPP is not going to prevent them from permanently closing their operations in local communities," NRA Executive Vice President Sean Kennedy wrote in his letter.

The pandemic has cost 3 million restaurant employees their jobs, the industry has lost $25 billion in revenue and 15% of restaurants are permanently closing.

"The premise of the Paycheck Protection Program is to be a vital way of allowing restaurants to bridge this crisis, but there are warning signs that it is not providing the relief that is so desperately needed for our industry," he said.

The association praised Congressional leaders who have pledged to provide PPP funds beyond the $349 billion authorized by Congress and called for expanding the program to the maximum possible level. It noted that operational and staffing issues unique to the industry have hindered restaurants’ access to PPP funding. 

To address these challenges, the association is asking Congressional leaders to address the following changes:

• Easing restrictions to reflect industry realities such as staffing levels far below the threshold required by PPP because restaurants are closed, or at skeleton staff levels.
• Timing flexibility to extend the covered period from 60 to 90 days because there is a growing concern that restaurants will not be fully operational in time to meet the requirement.
• Match loan terms implemented at two years to the 10-year maturity date in the language written by Congress to help deal with long-term instability ahead.
• Re-emphasize that the Small Business Administrator and Secretary of the Treasury can act on their explicit "de minimis" exemption authority to protect businesses that face reductions in loan forgiveness especially if a business has a major decrease in sales.
• Barriers like the personal guarantee and collateral requirements for Economic Injury Disaster Loans should be removed to allow employers and employees to utilize liquidity immediately, and restaurants should be able to access a second EIDL because of the prolonged impact on the industry.
• The  Employee Retention Tax Credit must be amplified to ensure more businesses can retain employees during government-ordered shutdowns and distancing protocols, along with other key changes.
• 501(c)(6) nonprofit organizations should be able to participate in PPP, so state restaurant associations and destination marketing organizations can continue to provide critical service and promotional programs to support local economies.
• Businesses utilizing PPP and seeking loan forgiveness must be allowed to defer payroll taxes owed this year to the next two years as provided under the CARES Act.

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