Coronavirus Daily Update: 4.6.20

Coronavirus Daily Update 4.6.20

Coronavirus update 4/6/20

MRA Common Questions:

My bank is still not ready to receive my PPP application?

Some banks have come on and are beginning to process applications, but the vast majority have not. We have heard informally that 4/8 is the target date for all banks to be up and ready. An SBA lender list can be found at: www.sba.gov/MA

The PPP may not work for my business, what are my other options?

There are two SBA emergency capital programs that are available to the public in addition to the PPP.

First is a Low interest, long term “Economic Injury Disaster Loan” for up to $2 million. The first payment is deferred for 12 months. The application can be completed online at www.sba.gov/DISASTER
Second, if you apply for that Disaster Loan – you can ask for an “Economic Injury Disaster Loan Advance” for up to $10,000 as part of the loan application. If approved, these funds can be used for payroll and other operating expenses and can be FORGIVEN.

Why might the PPP not work for me?

S omething to consider....we are under the impression that the clock on the 8 weeks starts ticking as soon as the money hits your account. For some operators, it might not make sense to take employees off UI because they will not be in operation. Our industry will most likely need a ramp up period back to capacity. It might make more sense for operators to use that money in 5-8 weeks, which is currently not permitted.

The MRA is raising this point about the need for restaurants to secure the loan now and use it at another time with both the National Restaurant Association and our congressional delegation. Reminder, the PPP was written to take into account all businesses. As we know, our industry is different due to it's size, labor intensity and disproportionate COVID-19 impact.

The MRA can’t advise what specific course of action to take (whether it’s PPP, EIDL, Employee Retention Tax Credits o r some combination of each.

Consideration needs to to be given to:

how much of your business is currently generating revenue (totally closed vs. partial operating);
how this may evolve in June/July/August/into the Fall;
which employees are invaluable and what will the restaurant see with expected/usual turnover;
the best advice we can offer is to work with your trusted banking and accounting professionals.

What is the employee retention tax credit?

Employee Retention Tax Credit

The employee retention tax credit (ERTC) for employers subject to closure due to coronavirus. The provision provides a refundable payroll tax credit for 50% of wages paid by employers to employees during the crisis. The credit is available to employers whose operations were fully or partially suspended, due to a coronavirus-related shut-down order, or gross receipts declined by more than 50% when compared to the same quarter in the prior year.

For employers with greater than 100 full-time employees, qualified wages are wages paid to employees when they are not providing services due to the coronavirus-related circumstances described above. For eligible employers with 100 or fewer full-time employees, all employee wages qualify for the credit, whether the employer is open for business or subject to a shut-down order. The credit is provided for the first $10,000 of compensation, including health benefits, paid to an eligible employee. The credit is provided for wages paid or incurred from March 13, 2020 through December 31, 2020.

The Department of Unemployment Assistance has updated their unemployment assistance request contact form:

More people applied for UI benefits in the last two weeks than the entirety of 2019. The DUA is working through claims and trying to process every person that is eligible. If employees are having difficulty they are encouraged to use this form:

https://www.mass.gov/forms/covid-19-department-of-unemployment-assistance-contact-request

Massachusetts Restaurant Association

160 East Main Street, Suite 2, Westborough, MA 01581

Phone: (508) 303-9905 www.themassrest.org

Visit our website