In this new world we're all living in, there is a huge amount of information available, but it's difficult to make sense of it all. In this email, VRLTA is focusing on giving restaurants data, highlights, and links to the most critical information you need.
Restaurants can qualify for Federal Assistance, including:
SBA Economic Injury Disaster Loan (EIDL)
- If you already applied for an SBA loan, you may have received an email informing you that, because the CARES Act was passed, you will need to apply again to be able to receive the one-time $10,000 advance that was included in the CARES Act. This Advance may be available even if your previous EIDL application was declined or is still pending, and will be forgiven.
- SBA notified applicants that If you wish to apply for the Advance on your EIDL, please visit www.SBA.gov/Disaster as soon as possible to fill out a new, streamlined application. In order to qualify for the Advance, you need to submit this new application even if you previously submitted an EIDL application. Applying for the Advance will not impact the status or slow your existing application.
- You are not able to combine an EIDL loan with a PPP; we are waiting on clarity to determine how this impacts the $10k Advance.
CARES Act Payroll Protection Plan
- The Payroll Protection Plan (PPP) included in the CARES Act is the biggest benefit for employers, and it provides 100% forgivable loans to restaurants to use for payroll, rent or lease obligations, and utilities as long as you continue to employ your full staff. The application process will likely not open until 4/15/20. Click here for a small business checklist and guide for the CARES Act prepared by the US Chamber of Commerce.
- As a reminder, there are different opportunities for relief available through the CARES ACT and the Small Business Administration, and we recommend speaking with your lender, attorney or business adviser to determine the best route for you. One of the top hold ups with completing loan documents comes from a lack of having corporate documents in order, so read below to make sure you are prepared on the front end to take advantage of the Payroll Protection Plan (PPP).
- Assemble 3 years business tax returns and financials—include all entities.
- Be prepared to validate and detail your payroll expenses.
- Past SBA 7a loans required personal tax returns and Personal Financial Statements (not clear if needed or not for PPP, but probably best to assemble).
- Get your corporate documents in order: corporate status for every entity needs to be up to date and current, copies of each company’s registered Articles and signed Operating Agreement (or complete bylaws with up to date minutes naming the officers), up to date insurance on the company, copy of ID for any signer, and be prepared to accurately fill out a Beneficial Ownership Form.
Families First Coronavirus Response Act
- Phase 2 of the Congressional response to coronavirus resulted in the Families First Coronavirus Response Act (FFCRA), which goes into effect on April 1st. The U.S. Department of Labor published another round of guidance to its growing questions and answers list, which includes additional information on the small business hardship exemption. However, these answers still don’t provide insight about the actual process for applying for the exemption. We expect more guidance before the effective date. Click here for the full DOL Question and Answer section. Click here for the National Restaurant Association’s recap of the FFCRA.
- Earlier guidance this week stated “to elect this small business exemption, you should document why your business with fewer than 50 employees meets the criteria set forth by the Department, which will be addressed in more detail in forthcoming regulations.” This leads us to believe the Department is going to make us wait until the regulations are published for the answer to the process question. Click here to read specific answers addressing the hardship exemption for small businesses with less than 50 employees.
