Restaurant Owners Say New PPP Package Falls Short

After what has been several months of debate, negotiation, sabre rattling and compromise, the United States Congress has finally passed a second round of stimulus, making it in under the wire before legislators left D.C. for their holiday break.  And those funds, it seems, are rolling in just in the St. Nick of time, so to speak, as COVID-19 case numbers have been consistently surging since early November and a second round of shut-downs and stay-at-home orders are going into effect in the U.S. and around the world.

And as the details of the stimulus package start to emerge, one might assume the news that additional PPP (paycheck protection funds) will be up for grabs for SMBs out of this latest round of stimulus funds would be great news in the SMB segment — particularly small and independently-owned restaurants that make up such a large share of Main Street businesses.  But the response hasn’t been an entirely warm round of applause, according to reports in QSR.  The Independent Restaurant Coalition (the IRC), formed by chefs and independent restaurant owners, has rejected Congress’ action, noting it “falls woefully short of giving 11 million independent restaurant workers the job security they need before the holidays.”

“Congress understands that dining restrictions, a surging pandemic and winter weather are a perfect storm for a restaurant employment crisis that is disproportionately impacting single mothers, people of color, immigrants, the formerly incarcerated and young people,” the IRC said. “When we’ve been asked by the government to change the way we do business, our elected officials need to help us stay in business. It’s clear Congress wants to help us and we gave them a plan to do that. This legislation isn’t it.”

What The Stimulus Does (And Doesn’t) Do 

The $900 billion stimulus ensures that taxpayers will be able to continue collecting unemployment assistance through the early spring, thereby extending the program that others would have ended on Christmas and tossed about 12 million people off of unemployment on the 26th.  Unemployed restaurant workers will also qualify for the new supplemental jobless aid of $300 per week for 11 weeks. Restaurant workers will also receive the stimulus checks all Americans receive, this time worth $600 (plus an additional $600 for every dependent).

Those unable to pay rent may also be able to qualify for a share of $25 billion worth of rental assistance, and the increase in SNAP benefits should help poor families buy food.

Most impactful for restaurant owners and operators, as opposed to for their furloughed and underemployed staff, approximately $280 billion is expected to go toward another round of the Paycheck Protection Program — the vast majority of the $325 billion slated for small businesses. The latest PPP, according to reports, will also offer preferential loan terms to the hospitality industry.

What the bill lacks, and what has generated a lot of pushback from within the industry, is dedicated aid for the restaurant industry as a whole, or any provision designed to specifically represent the needs of the hospitality industry.  The airline industry has lost fewer than 140,000 workers, restaurant advocates noted, and will receive $16 billion in direct assistance from the government. Movie theaters and concert venues will also benefit from $15 billion in grant money.

So what comes next for restaurants?  According to the IRC,  what has passed this week is not sufficient, but will buy operators a little more time.  To really be of help, however, more legislation is needed.

“The small changes to PPP funding for independent restaurants will buy time for Congress to negotiate a more robust plan, and we are grateful to many champions in the House and Senate who fought for those changes,” the IRC said. “But make no mistake: independent restaurants and bars will continue to close without additional relief this winter, leaving millions more out of work.”

There is some hope that more relief could be coming along with the start of the Biden administration in January — but given how hard new programs can be to implement, a lot of restaurants and bars will still likely close while waiting for the help on the way.