- Senate Republicans have proposed a $1 trillion stimulus package this week, titled the Heals Act, to provide another round of benefits amid the novel coronavirus pandemic, including additional direct stimulus payments, a new round of funding for the Paycheck Protection Program and emergency business loans, according to The Washington Post.
- The new round of PPP funding, which would be worth about $190 billion combined with leftover loans, would be available to companies with 300 or fewer employees that can demonstrate a revenue loss of at least 50%.
- The package also includes about $100 billion in funding for long-term loans for seasonal businesses and businesses in low-income areas. Borrowers would be able to borrow up to twice their annual revenue up to $10 million at an interest rate of 1%.
While broad-based bills like the Heals Act would provide some relief to the restaurant segment, groups like the National Restaurant Association and Independent Restaurant Coalition continue to push for industry-specific support, such as what is being presented in the Restaurants Act, which would provide restaurants with $120 billion in funding.
"The RESTAURANTS Act is the only bipartisan measure designed specifically to address the unique vulnerabilities of America's 500,000 independent restaurants," the Independent Restaurant Coalition said in a statement Monday. "It also props up countless other industries and millions of jobs up and down the supply chain."
The industry, which saw more than 8 million restaurant workers unemployed at the height of the pandemic, faces losses that could reach $240 billion by the end of the year, according to the National Restaurant Association.
"This isn’t about just singling out restaurants for restaurants’ sake," Tom Bené, CEO of the National Restaurant Association, told Restaurant Dive in an interview. "We’re the second largest public employer. We’ve had a huge impact. We were some of the first folks to have to close. We’ve been slowly reopening, but certainly this up and down that we’re seeing as cases spike and having to either be closed or limit the amount of capacity has been challenging."
The new PPP loans under the Heals Act would not be accessible unless a business had a 50% reduction in revenue, but in a low margin business, just a 25% to 30% reduction in revenue means a restaurant is in a loss situation, Bené said.
"Even when we make 5%, 95% or 95 cents of every dollar goes back into the economy, whether it’s purchasing food, paying rent or certainly hiring employees," Bené said. "We need to continue to push for more than just 50% reduction in revenue."
The NRA is also working to educate people that restaurants have already been doing everything they can to make things safe, and the association sent a letter to governors and mayors on Monday to reiterate the safety procedures that have been implemented.
"Our point of view is it’s really unfair to single out this industry. Broadly speaking, the industry is following the guidelines that were put out there," Bené said.
Reopening and closing restaurants is only making things more challenging for restaurants, he said.
"It’s so critical for these businesses not to make money during this time, but actually to survive during this time, and I think we all know how important they are for the communities we live in and work in," Bené said. "I think we will emerge from this over time because of that passion and flexibility and adaptability that still exists. We need to continue to find ways to support them in the interim."