Coronavirus Update 3/26/20
Washington DC Update
Late last night, 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.
Passage in both chambers is all but assured – the only question is one of timing. The Senate passed the bill last night, and the House will either vote tonight or tomorrow morning. President Trump is likely to sign the bill very soon thereafter.
The assessment of the bill is that it is overall very strong, with many provisions that specifically reflect asks that will help the industry. Some highlights:
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 and hotels. The 500-employee number is based on the number of employees at each physical location. A restaurant with 600 employees over five restaurant properties would qualify for these loans.
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 (QIP)
At long last, restaurants can immediately write off costs associated with improving facilities. The QIP fix is complete.
This legislation will require regulatory action from the Administration. We are working to minimize disruption for our members and get recovery assistance out as quickly as possible.
Congress is likely to draft subsequent recovery bills. We are working on what industry-specific
provisions should be included.
Webinar on COVID 3
The National Restaurant Association Public Affairs team will be hosting a webinar at 3pm eastern tomorrow (Friday) to discuss the CARES Act (i.e. COVID 3)