Restaurants push for changes to critical COVID EIDL program
The main one: raising the ceiling to $ 2 million per loan.
Restaurants and other businesses in the hospitality industry are not yet out of the woods when it comes to tackling the financial woes of the pandemic, according to a letter sent to the US Small Business Administration by the National Restaurant Association and other hotel groups.
The letter, dated August 24, requests that the SBA make changes to the COVID economic disaster loan program. Specifically, the Association and other groups that signed the letter requested that the EIDL loan limit be raised to $ 2 million per loan from the current maximum of $ 500,000. They also called for a rule on who can access the program be changed to allow âowners of small multi-unit businessesâ to access the loan program.
âIn the first six months of the outbreak, an estimated 32,700 franchise businesses closed,â the letter said, â21,834 businesses were temporarily closed, while 10,875 businesses were closed permanently. catering and foodservice is still reeling from a loss of revenue of $ 300 billion, which has resulted in the loss of one million jobs and the closure of 90,000 restaurants permanently or in the long term â¦ The delta variant has caused new health and economic problems, and small businesses across the country are gearing up for a tough end to the year. Many business owners are in desperate need of extra cash to ensure their doors stay on. open. “
In addition to highlighting the need for additional cash, the letter explained the importance of changing restrictions within the EIDL program, restrictions that limit the resources available to multi-unit business owners. Current restrictions, the authors say, prevent operators from using the Paycheck Protection Program and EIDL simultaneously. The PPP program has lifted restrictions on multi-unit operators.
“The EIDL program is the only remaining federal solution that can provide essential access to capital for small businesses,” the letter said.
Franchisees have received much less funding than their independent counterparts. According to an FOIA analysis of the Restaurant Revitalization Fund, restaurant franchises received less than 10 percent ($ 2.65 billion) of the total amount distributed by the RRF, compared to nearly 90 percent ($ 25.6 billion). dollars) of independent restaurants.
With the Delta variant causing more concern among owners and operators, it’s no surprise that franchise owners are clamoring for more relief opportunities. Of the more than 350,000 restaurants that requested assistance through the RRF, less than half (100,650) received financial assistance.
The uncertainty surrounding financial aid, coupled with recent survey data collected by the Association, explains the pressure from hospitality professionals for additional help. According to a recent study conducted by the Association, nearly one in five adults has stopped going out to restaurants. Sixty percent of those surveyed also admitted to having changed their eating habits due to the rise of the delta variant.
âFor an industry that needs a packed house every night to make a profit, this is a dangerous trend,â said Sean Kennedy, executive vice president of public affairs for the National Restaurant Association, in a statement. hurry. “These changes indicate a decline in consumer confidence, which will make it more difficult for most restaurateurs to maintain their fragile financial stability.”
Kennedy also warned that the increase in coronavirus variants like the Delta could force more restaurants to close permanently.
“The small gains our industry has made in financial security are in danger of being wiped out,” Kennedy said, “dashing the hopes of communities, entrepreneurs and consumers nationwide.”