On Friday, March 27, 2020, the U.S. federal government signed The “Coronavirus Aid, Relief, and Economic Security Act” (CARES Act) into law, providing more than $2 trillion in financial relief to both individuals and businesses that have experienced economic hardship as a result of the COVID-19 pandemic. We want to help you better understand the provisions that may have the greatest impact on affected restaurant operators.
Here are a few key takeaways:
The Payroll Protection Program provides small businesses, including restaurants, with $349 billion in 100% federally guaranteed loans called Paycheck Protection Loans (PPLs). There’s an opportunity to have these loans forgiven if used for eligible immediate operating costs and payroll costs. The covered period is February 15, 2020 to June 30, 2020.
Economic Injury Disaster Loans (EIDLs) are loans offered to small business borrowers that have suffered economic injury as a result of a pandemic or other disaster. Small businesses that apply for an EIDL now can also request a grant of up to $10,000 for eligible costs. If you’re denied an EIDL and receive the grant, you can keep the grant money despite not meeting the requirements for an EIDL.
An Employee Retention Tax Credit (ERTC) is for impacted employers that keep their employees, despite being impacted by COVID-19. 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.
This tax credit covers up to 50% of the first $10,000 of compensation, including health benefits, paid to an eligible employee.
While this doesn’t cover everything in the 800-page bill, we believe these provisions will make a positive impact on the restaurant community.
We also know that keeping your business afloat during COVID-19 is complicated. That’s why we created the COVID-19 Resource Guide.