Congress Just Passed a Bill That Will Help More Restaurants Survive (via RobbReport)
Aid, Relief and Economic Recover Act to inject $2 trillion of capital directly into the market. Inside that bill was the PPP, which earmarked $350 billion for small businesses that, if the companies followed guidelines, the loan would essentially convert to a government-backed grant.
The problems with the Small Business Administration’s program rollout were legion. Money intended for small businesses was hoovered up by large corporate chains likeand Shake Shack . Banks complained the guidelines for forgiveness were unclear, making them weary about the program. And then the first $350 billion ran our almost immediately.
Congress followed up a few weeks later with an additional $310 billion, with more of the money set aside for community banks. In that original tranche of PPP, community banks proved themselves more adept at servicing small businesses than big banks like Chase, which favored large institutional clients in the early days of the PPP.
Restaurateurs argued the original structure of the program didn’t work for them because Covid-19 shutdowns would affect their businesses for months to come, not just eight weeks. Once they spent all the loan money, they’d have to lay people off again for lack of sales. Now they can spend that money in a way that lets them ramp up more slowly and have capital that allows them to fully reopen for dine-in service.
“This reality we’re in right now has two different parts, and I really think we’re in the easy part now, which is just surviving through the shelter-at-home orders,” the
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