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Independent Restaurant Coalition drafts letter to congress for help during COVID-19 pandemic

Restaurants forced to close their doors due to the COVID-19 pandemic are reaching out to congress with a letter for help.

LANCASTER, Pa. — Some restaurants still remain open for take out and curb side pick up, but many were forced to completely shut their doors because of the COVID-19 pandemic. 

They are now speaking out in a letter to congress, asking for help so they don't have to stay closed for good.

Restaurants in Lancaster taking to social media encouraging customers to support them in signing the 'Save Restaurants' letter

Luca, a Italian restaurant in Lancaster shared the link on Instagram. They were open for carry out for a few weeks, but have since closed their doors and are asking congress to take action. 

The Independent Restaurant Coalition starts their letter by thanking congress   in their efforts to help keep people safe during this critical time. 

Then they address the CARES Act -- saying it acts as a temporary lifeline but doesn't adequately provide the best resources to ensure the nearly 500,000 of the independently owned restaurants will survive the pandemic. 

According to the letter restaurants contribute roughly one trillion dollars to the economy annually. 

A big concern, is paying back vendors. When restaurants re-open first they'll have to pay outstanding supplier bills before they can restock and rehire -- therefore prolonging the re-opening process. 

The letter breaks down four suggestions to better help save restaurants. 

This is the federal request from the Independent Restaurant Coalition: 

1. Fix the Flaws Within the Paycheck Protection Program. 
The Paycheck Protection Program (PPP) was designed to accommodate all small businesses, including restaurants, and allow them to secure necessary capital to reopen their doors and hire back employees. However, the bill was written in such a way that prevents restaurants from taking advantage of the program’s benefits. The following changes are required:

  • Extend the maximum loan amounts to 3 months after we are allowed to reopen and operate at full capacity. The intention of the CARES Act is to make sure independent restaurants can survive as engines of our economy. Yet, the current structure of loan forgiveness does not help the tens of thousands of restaurants who are prohibited from opening their doors. After the 8-week clock runs out, independent restaurants will still be closed and we will be forced to lay off our entire staffs again. Relief is needed until independent restaurants are allowed to reopen and operate at full capacity. 

  • Increase the size of the PPP beyond the $350B and reinstate the $500 million gross revenue cap. There is a real fear that the funding set aside in the CARES Act for small businesses will run out before we are allowed to reopen. In fact, it is estimated that demand for forgivable loans could exceed $1 trillion. Moreover, Congress should reestablish the $500 million gross revenue cap that was included in an earlier version of the CARES Act. This cap was meant to separate the small, independent restaurants from other large, well-capitalized businesses that have infinitely more resources. Reinstalling the cap would mean that more funds would be available for small, independent restaurants.

  • Increase the loan repayment to 10 years from its current 2 years. As described in the points above, some restaurants will struggle to qualify for 100% loan forgiveness. Unforgiven loans will result in restaurants being saddled with debt at a time when we can least afford it. The original Senate bill language set a 10-year term to repay a PPP loan that was not fully forgiven. Treasury then provided guidance setting the term to two years. This is unworkable and could cause the very problem this bill seeks to prevent — the large-scale failure of small businesses.

2. Create a Restaurant Stabilization Fund

The Paycheck Protection Program will help us rehire our employees if the timing issue noted above can be resolved. But, more is required to ensure our businesses can reopen. If we do not have funds to pay our vendors and the associated reopening costs, this will prove an insurmountable barrier to reopening our restaurants. A dedicated restaurant recovery fund is critical to the recovery of our independent restaurants. With a $50-$100 billion reinvestment, independent restaurants would be able to navigate local and state closure mandates, hire back our employees, and survive for the future as patrons return to dining out in restaurants again. 

3. Create New Tax Rebates for Independent Restaurants to Survive Post-Crisis

Independent restaurants will face a very challenging and a completely unknown operating environment in the months to come. Assuming we have enough resources to reopen, business will likely be down by at least 30% through 2021, which could mean running out of cash and forcing massive layoffs and possible closures. Two new rebate programs are required to get us up and running and to keep us in business during the difficult time ahead.

  • A “jobs provider rebate” will give tax relief to restaurants and reward them based on how many people we employ. With 11 million workers, we are one of the largest employers in the nation. We also have some of the smallest margins of any sector. We should be incentivized for keeping millions of Americans employed during a difficult time.

  • A “rent rebate” is required so we can make our landlords whole when revenue will inevitably be down. Going forward, a “rent rebate” ensures restaurants can maintain their lease through this recovery.

4. Require Business Interruption Insurance to Cover COVID-19

 Every restaurant across the country pays premiums for business interruption insurance to safeguard their businesses and the livelihoods of their employees in the case of natural disaster or Civil Authority Shutdown. Unfortunately, these very firms we rely on to protect us are avoiding coverage during this disaster by falsely claiming that the virus does not cause a dangerous condition to property. The entire restaurant sector and all connected industries are crippled by a nationwide public health shutdown impacting all of our livelihoods. Whether policies have virus exclusions or not, we need Congress to mandate that insurance companies fulfill their obligations.

You can still support local restaurants across South Central PA. Some remain open for take out and have modified their hours. Just be sure to check their websites or social media pages for more information. 

If you'd like to co-sign the 'Save Restaurants' letter you can do so here

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