Coronavirus update 4/22/20
Tell Congress to Support the Restaurant Blueprint for Recovery
No other industry has been hit harder by the coronavirus than restaurants. The impact of the restaurant industry cannot be understated—our sales exceed the agriculture, airline, railroad, ground transportation, and spectator sports industries combined. Yet, restaurants will be one of the slowest industries to bounce back from the effects of this pandemic.
Please take a few moments and contact your Representative and Senators—tell them that restaurants, employees, and consumers need Congress to act on the
“Blueprint for Recovery,
” so that your restaurant can survive the long road to recovery.
The Senate passed a $484 billion interim coronavirus funding bill via voice vote on Tuesday. The agreement will fund $322 billion to replenish the PPP, of which $60 billion of that total will be allocated to small lenders and community banks. In addition, $60 billion for the Economic Injury Disaster Loan program, $75 billion for hospitals and $25 billion to expand testing. Members of the House could vote as soon as Thursday on the bill.
What does loan forgiveness look like?
From the current Treasury guidance:
How much of my loan will be forgiven?
You will owe money when your loan is due if you use the loan amount for anything other than payroll costs, mortgage interest, rent, and utilities payments over the 8 weeks after getting the loan. Due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs.
You will also owe money if you do not maintain your staff and payroll.
- Number of Staff: Your loan forgiveness will be reduced if you decrease your full-time employee headcount.
- Level of Payroll: Your loan forgiveness will also be reduced if you decrease salaries and wages by more than 25% for any employee that made less than $100,000 annualized in 2019.
- Re-Hiring: You have until June 30, 2020 to restore your full-time employment and salary levels for any changes made between February 15, 2020 and April 26, 2020.
Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced proportionally if full-time headcount declines or if salaries and wages decrease; however employers can eliminate the reduction in head count or salaries by June 30, 2020 and restore the maximum loan forgiveness. The same employee does not need to be retained, it is the equivalent.
How can I request loan forgiveness?
You can submit a request to the lender that is servicing the loan. The request will include documents that verify the number of full-time equivalent employees and pay rates, as well as the payments on eligible mortgage, lease, and utility obligations. You must certify that the documents are true and that you used the forgiveness amount to keep employees and make eligible mortgage interest, rent, and utility payments. The lender must make a decision on the forgiveness within 60 days.