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As small businesses around the country eye a chance to receive federal aid from the government now that a deal has been reached to replenish the Paycheck Protection Program (PPP), one sector is disappointed its concerns have yet to be addressed on Capitol Hill.
The Independent Restaurant Coalition issued a statement in response to the legislation on Tuesday, slamming lawmakers for “forgetting” local restaurants.
"Today we learned Congress does not care if local restaurants close forever,” the statement read. “The Senate passed new funding for the Paycheck Protection Program but until that program is fixed, it still won't help America's 500,000 independent restaurants reopen or ensure their 11 million employees have a job when this ends.”
According to the group, only 9 percent of PPP loans have gone to the hospitality industry, despite the fact that it accounted for about 60 percent of unemployment claims in March.
Employment in leisure and hospitality fell by 459,000 in March, according to data from the Bureau of Labor Statistics, mainly in food services and drinking places. That drop accounted for roughly two-thirds of the 701,000 total decline in jobs.
As previously reported by FOX Business, industry trade groups have raised repeated concerns about PPP’s terms and its ability to help restaurants.
Through PPP, applicants can receive up to $10 million. However, the money is expected to be used within eight weeks – at a time when restaurants and bars across the country are either completely closed or only partially operating.
The National Restaurant Association has asked for the ability to allocate a larger percentage of funding toward nonpayroll expenses and an extension of the eight-week period to use the loan.
Additionally, restaurants are competing to retain workers with expanded unemployment benefits, which, in some states, are now higher than the average restaurant workers’ salary. If they are unable to keep on (or rehire) their full-time staffing levels, they are likely to lose the ability to have their PPP loan forgiven.
“Restaurants are cash flow businesses, and until they can generate revenue they'll still have a hard time maintaining a payroll whenever they reopen,” the Independent Restaurant Coalition added. “Changes to the Paycheck Protection Program, like moving the origination date of the loan to when restaurants can legally operate, are necessary to ensure restaurants can afford to reopen and rehire our workers.”
The industry has warned that 7 million jobs in the sector could be at stake – as well as $225 billion in revenue – over the course of three months.
The Trump administration and Senate Democrats reached a deal on Tuesday on new legislation, which allocates an additional $310 billion to PPP and $50 billion to the Small Business Administration’s emergency disaster loan program. About $75 billion will go to hospitals and $25 billion will be put toward coronavirus testing.