Details on the Federal Coronavirus Relief Package
On Wednesday, March 25th, congressional leaders released the final text of their $2 trillion coronavirus rescue package. The agreement includes a dramatic expansion of unemployment insurance, a rescue fund for state and local governments, immediate cash for hospitals and a huge pool of grants and loans for small businesses. To see the National Restaurant Association's full analysis please visit www.nvrestaurants.com.
Passage in both chambers is all but assured—the only question is one of timing. The Senate is on a path to pass the bill this evening. Timing of a House bill remains murky. A vote Thursday night or Friday morning is likely. President Trump is likely to sign the bill very soon thereafter.
Overall the bill is very strong, with many provisions that specifically reflect the National Restaurant Association’s asks from last week. Here are the highlights of the deal:
The measure creates a $349 billion program for the SBA to offer unique loans to small businesses (500 or fewer employees). The loan amount is based on 250% of the borrower’s average monthly payroll cost for the preceding year (provisions for seasonal employers are included), up to $10 million. Collateral requirements are waived, and the “credit elsewhere” requirements (which have slowed down the process) have been waived as well. The loan is forgiven if used for payroll costs, mortgage interest or rent/utilities.
• An exception was made to the small business requirement for restaurants, food service, caterers and hotels. The 500-employee number is based on the number of employees at each physical location. So these types of businesses with 600 employees over multiple properties would qualify for these loans. This ensures that a number of larger independent restaurants and franchise owners can participate.
• Only small businesses that employ less than 500 employees are eligible for Paycheck Protection Program and SBA Loan Forgiveness. However, restaurants, foodservice, caterers and hotels that employ not more than 500 employees per physical location of the business are also eligible to receive a single loan.
The agreement offers restaurant owners relief in the form of Net Operating Loss (NOL) carrybacks, delay of payment of employer payroll taxes and an Employee Retention Tax Credit.
Qualified Improvement Property
At long last, restaurants can immediately write off costs associated with improving facilities. The QIP fix is complete.
Congress is likely to draft subsequent recovery bills. We are working on what industry-specific provisions should be included.
Thanks to You
In an era of chronic dysfunction in Washington, Congress broke modern speed records in developing comprehensive legislation to address a national pandemic that has devastated many businesses—particularly ours. Amidst the disruption of shuttered congressional offices and a cacophony of industries asking for assistance, the restaurant industry spoke with a clear, unified voice. We achieved unprecedented levels of grassroots engagement at every level of government.
Once this bill has been enacted, we are planning a Virtual Town Hall to answer your questions. Call-in information and how register to follow. For questions, contact firstname.lastname@example.org or (702) 878-2313.