On December 20, Congress passed a $900 billion aid package to deliver overdue economic relief to businesses impacted by COVID-19. So, what does that mean for our struggling local restaurants? The most impactful assistance for the hospitality industry will likely be found in the new round of Paycheck Protection Program (PPP) loans, this time with a special provision added specifically for restaurants. Food and drink establishments are eligible for larger loans than other industries, up to 3.5 times their monthly payroll (as opposed to 2.5 times monthly payroll). Other welcome changes to this round of PPP loans include the fact that small business owners can deduct the expenses they pay with PPP funds on their taxes, and that restaurants with fewer than 300 employees at each physical location can apply for the loans.
“This fresh round of PPP is a necessary shot in the arm for the restaurant industry,” Colorado Restaurant Association CEO Sonia Riggs said in a statement. “Without question, it will keep some restaurants from closing in the next couple months and give them resources to scratch through a very bleak winter…but this is not the silver bullet to save the industry.”
While the new round of PPP loans can be forgiven if used properly, they are still loans—not the grants the hospitality industry was seeking. The earlier spring PPP loans were also difficult for smaller entities to get, as many banks prioritized their bigger customers. Further, an analysis of the last round of PPP loans, which were specifically designed to help small businesses, revealed that fast food chains received more than $1 billion of the loans, and that a quarter of the money went to just one percent of recipients.
What most independent restaurants and bars were hoping for in this relief package was the inclusion of the RESTAURANTS Act, which would have provided $120 billion in grants to help make up for the loss of revenue those establishments have experienced thus far in 2020, and will continue to experience into 2021 and beyond. Despite fierce lobbying and social media efforts, the RESTAURANTS Act was left out of the new relief bill.
Bobby Stuckey, master sommelier and owner of Frasca Hospitality Group (Frasca Food and Wine, Tavernetta, Pizzeria Locale, and Sunday Vinyl), has spent the last several months working for hours each day to get the RESTAURANTS Act to Congress, and he’s very disappointed that it wasn’t included in the new aid bill.
“There will be a lot of businesses that go down,” Stuckey says. “And the senators and congressmen that fought against getting the RESTAURANTS Act included, they’re going to have that blood on their hands when tens of thousands of small businesses don’t make it in the next few months. This [the new PPP loans] is a short bridge, and it’s not enough. No one’s addressing the fact that only about 8 percent [of PPP loans] went to restaurants the first time around. There will be a lot of people on the edge who don’t get anything.”
Others in the industry expressed similar frustrations with the new relief bill, but are hoping the PPP loans get them through. “This new PPP will help, and we hope we are able to access it before it runs out,” says Erika Thomas, owner of High Point Creamery. “Our industry has been badly battered and there’s a long winter ahead. Theaters and airlines were given grants not afforded to us, and we need that level of support to help save independent restaurants.”
Stuckey says that he’ll be back at it in January, working on behalf of the Independent Restaurant Coalition, to try to get aid for his hurting industry. “I have a lot more endurance than they have,” Stuckey says of the congressional leaders that he feels left independent restaurants behind. “I will fight the extra innings to make sure every small restaurant and the families that they support across the U.S. have a chance to get through this.”