In these crazy times food lovers are worried about their favorite restaurants. How will they survive in the time of Covid 19. There is hope last week the US government passed “The CARES Act”. This bill has provided funding for up to$350 billion.
This money is being dedicated to preventing layoffs also business closures. Workers have to stay home during the outbreak is why PPP is needed.
Companies with 500 employees or fewer that maintain their payroll during Coronavirus, will receive up to 8 weeks of cash-flow assistance.
For our foodie lover out there we are very concerned with the local restaurants and their workers. Below are a series of questions that many restaurant owners are asking about “The Cares Act.”
Q: How do I as a restaurant owner apply for a loan through the Paycheck Protection Program?
The program is run through the Small Business Administration. They have established a network of 1,800 approved lenders that process small business loans.
If you are interested in a Paycheck Protection Program loan, you should first contact your bank to see if it is an SBA-approved lender. If your bank is not an SBA-approved lender, you can get in-touch with SBA and find an approved bank to work with.
Q: When will the new funding be made available to my restaurant?
The Trump’s administration treasury Secretary Steven Mnuchin said last Monday on Fox Business Network that small business loans will be made available starting Friday April 3rd.
Detailed instructions on how to apply for them are to be added to the Small Business Administration’s website.
Q: Would my restaurant qualify under the Paycheck Protection Program?
Small businesses, nonprofits, tribal business concerns that meet the SBA’s standard business size definition and veterans organizations organized under 501(c)(19) with fewer than 500 employees are eligible for loans under the program.
If you are in the food service business, the 500-employee cap is applied on a per-physical-location basis, according to a fact sheet published by the U.S. Chamber of Commerce.
There are criminal penalties for submitting false information on loan applications.
Q: How much money can my restaurant receive through the new loan program?
The Paycheck Protection Program allows for small business loans of up to $10 million to certain expenses and payroll. The SBA has other loan programs, including the federal disaster relief program, offer much smaller loans that you might be eligible for.
Q: What time period is covered by Paycheck Protection Program loans?
The PPP loans are good from costs incurred retroactive to Feb. 15 through June, 30 2020.
Q: Will I have to pay back the loan and or will it eventually be forgiven?
The answer is yes. But first you need to understand eligibility for loan forgiveness starts eight weeks after the loan origination date. There is a maximum 10-year maturity after application for loan forgiveness.
The act includes loan forgiveness for companies able to keep employees on payroll or continue paying bills throughout the coronavirus crisis.
The Paycheck Protection Program loan forgiveness will include payroll costs for individuals who don’t earn more than $100,000 in annual income. Mortgage and rent obligations, including interest and utility payments are included for this program.
There are some limitations to these loans. The total amount of forgiveness will be reduced if your workforce is shrunk. By through attrition or if you reduce wages.
If you are have to lay off your workers because of bad economic conditions, you may be able to preserve some of your loan guarantee by hiring them back.