U.S. Air Force file photo
Written by Edward Smith
As the second Covid relief package awaits President Trump’s signature, some industries are breathing a sigh of relief.
Details are starting to come out of the 5,000-plus page document that includes the governmental spending budget through September 2021.
Lawmakers singled out specific industries, earmarking money for companies impacted by government shutdowns — namely theaters, museums and zoos, while chambers of commerce and restaurants received expanded considerations.
Most directly, of the $300 billion in the bill set aside for businesses, $15 billion was allocated specifically for live venues, independent movie theaters and cultural institutions, according to the Journal of Accountancy.
The law mandates the Small Business Administration write the regulations for disbursing for the money within 10 days of the president’s signature.
Theaters and zoos have been unable to operate under any circumstances in many cities and states and would be able to apply once the bill is signed.
“We believe it will help us and are looking into it,” said Matt Sconce, CEO of Movie Heroes, which operates the Met Cinema in Oakhurst.
While restaurants did not receive a specific carve-out of their own, they may have access to larger loans or grants from a second tranche of Paycheck Protection Program money.
Hotels and restaurants may be eligible for PPP money up to three-and-a-half times their average monthly payroll costs, according to an article published by the National Restaurant Association in Winebusiness.com. Other businesses would only receive two-and-a-half times their normal payroll costs.
“Depending on the size of the restaurant business’ payroll, that could be significant,” said Kevin Green, principal with M. Green & Co., an accounting company in Tulare.
The article also pointed out that the newest round of PPP is limited to businesses with fewer than 300 employees. For restaurants, this was defined to mean 300 employees at a single location.
The threshold for first-time borrowers may be higher, including businesses with 500 or fewer employees who didn’t receive PPP loans originally.
“Any amount is going to be beneficial,” said Lorraine Salazar, owner of Sal’s Mexican Restaurant and past president of Fresno Chapter of the California Restaurant Association. She also noted that “30-40% just aren’t going to make it in the long term.”
Restaurant owners had been pressing for a relief carve-out of their own. The National Restaurant Association and the Independent Restaurant Coalition had asked for $120 billion to go to restaurants.
Chuck Van Fleet, president of the Fresno Chapter of the California Restaurant Association, is still hopeful that restaurants will be included in future relief packages. He called the addition to payroll allocation “a good start.”
His restaurant, Vino Grille and Spirits, is down $750,000 for the year, he said.
The bill also outlines the requirements for forgiveness.
Loans under $150,000 are forgivable, according to the law. Eligible costs include payroll, rent, covered mortgage interest and utilities, similar to the first round of PPP. In addition to these, costs spent on worker protection or facility modification were also included, according to the Journal of Accountancy.
Expenditures to suppliers considered essential to the borrower’s current operations also qualify, as do operating costs such as software, cloud computing services and accounting needs.
Sixty percent of funds will have to go toward payroll within a limited amount of time — similar to the first payroll.
Funds received from Economic Injury and Disaster Loans no longer have to be deducted from the PPP forgiveness amount, according to the Journal.
Breanna Hardy contributed to this reporting.