Renewed Senate stimulus plan allocates billions to restaurants

Yesterday, by 92 votes to seven, the Senate voted to extend the Paycheck Protection Program, which would otherwise have expired on March 31. Businesses now have until May 31 to apply for a loan. This round of PPP, adopted as part of Biden’s $ 1.9 trillion US bailout, allocated $ 7 billion expand PPP financing, which should make it easier for companies to pay bills beyond payroll. The extension also gives the Small Business Association until June 30 to process loan applications, which will hopefully allow them to deal with any backlog of applications.

The recovery program got off to a difficult start, with restaurant chains receiving loans, while small independent restaurants have struggled to request them. Black, Latin and Asian affairs received a smaller portion more funds than their white counterparts, largely because companies have to apply through their banks, and big banks like Chase tendency to favor chains and other great restaurants.

There were also rules about what businesses could and couldn’t use for money, and stipulations on what kind of expenses would ultimately result in loan forgiveness. And those rules often didn’t match the needs of the restaurant industry. For example, the money had to be used within a certain time frame and there was pressure to use the payroll loans, even when restaurants were closed and it would have been dangerous to have active employees. “This is a disguised gift to restaurateurs that helps the government to make their unemployment figures better than they are,” said restaurant owner Naomi Pomeroy on Eater’s Digest last May.

After public pressure, most channels that received PPP funds returned them, and the Biden administration reorganized PPP loans in an effort to make them fairer. This time there was an aa 14-day priority request counter for companies with less than 20 employees and an adjusted loan formula for solo-owners. Restaurants are also now able to use funds to pay vendors and build outdoor dining facilities.

The loan extension comes at a time when across the country, most states have allowed meals to be returned indoors to some extent, even if the number of COVID cases is stagnant or can even increase. As a result, restaurants, for better or worse, are more likely to use the loan to rehire employees. According to Forbes, in March, there was still $ 103 billion in unclaimed PPP funds: “By giving small businesses two additional months to apply and giving the SBA an additional month to process applications, we will help ensure that critical support is not being interrupted, ”House Small Business Committee chair Nydia M. Velázquez (D-NY) said in a statement.

Correction: Mar 26, 2:20 p.m .: This post has been updated to accurately reflect the amount allocated to PPP funds.

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