Des Moines, Iowa (December 21, 2020) — – The Iowa Restaurant Association today joined other state restaurant associations and the National Restaurant Association in breathing a small sigh of relief as Congress unveiled a $900 billion bill, which once completed, will provide desperately needed short-term economic support to the hospitality and other industries.
The plan includes several specific items that will help restaurants—most importantly, a second round of access to the Paycheck Protection Program (PPP). The new PPP program has several restaurant-specific provisions including:
- Enhanced PPP Loan Size: The PPP provides a business with a forgivable loan based on 2.5 times its monthly payroll costs. Restaurants, however, can seek forgivable loans based on 3.5 times monthly payroll costs.
- Enhanced Access to PPP: Companies that employ a total of 300 or more employees at all locations (combined) are deemed ineligible for the PPP. Today’s bipartisan plan reflects the reality that many mid-sized and larger restaurant groups are on the verge of bankruptcy and allows restaurants to qualify for PPP as long as they do not employ more than 300 employees at each physical location.
- The State and National Associations fought hard for other provisions that will benefit restaurants in the bill including the deductibility of business expenses paid with PPP loans, enhancement of the Employee Retention Tax Credit (ERTC), extension of the augmented Work Opportunity Tax Credit (WOTC), and increased tax deduction for business meals.
A detailed document provided by members of the Senate is available here.
“The action taken by Congress today will help hundreds Iowa restaurants, many of which are on the brink of shuttering their doors permanently, to live and see another day,” said Jessica Dunker, President and CEO of the Iowa Restaurant Association. “This second round of PPP, combined with unique enhancements for the restaurant sector, will provide critical access to short-term capital, but we still have a long way to go if we’re going to keep Iowa restaurants open long-term. We will continue to work with our partners, as well as federal and state leaders, to provide the support needed to put the hospitality industry on the road to recovery.”