Pizzeria owners and other restaurateurs can once again apply for federal loans under the Paycheck Protection Program as of Monday, April 27, according to a statement from the Small Business Administration and the Treasury Department. And those who have already applied will not have to apply again, the statement noted.
“We encourage all approved lenders to process loan applications previously submitted by eligible borrowers and disburse funds expeditiously,” read the statement from Treasury Secretary Steven Mnuchin and SBA Administrator Jovita Carranza.
“All eligible borrowers who need these funds should work with an approved lender to apply. Borrowers should carefully review PPP regulations and guidance and the certifications required to obtain a loan.”
Under new guidelines, borrowers will be required to certify that they need the PPP funding to reopen their businesses or keep them open—a measure apparently intended to prevent large, publicly-owned companies from raiding the till again. Before the PPP ran out of money earlier this month, major restaurant chains like Shake Shack and Ruth’s Chris Steakhouse had applied for and received loans of between $10 million and $20 million.
Forbes notes that PPP applicants will be required to “certify in ‘good faith’ that they have no access to additional sources of capital and that, as the law provides, ‘[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.'”
Funding for the PPP dried up in just two weeks, and Republicans and Democrats dickered over additional funding before passing legislation signed into law by President Trump last week. The new legislation pumps an addition $320 billion into the PPP and disaster loans. The loans can be forgiven if at least 75 percent of the money goes to keeping employees on the payroll.
According to a James Beard Foundation survey of restaurant owners released last week, 88 percent of respondents had applied for PPP loans, but only 41 percent were approved and 18 percent had heard nothing back about their application. Forty-five percent of those approved for the loans had not received any of the money when the survey was taken.
The National Restaurant Association has requested Congress to provide $240 billion in relief specifically targeted at the restaurant industry. The association estimates that more than 8 million restaurant employees have lost their jobs due to the COVID-19 pandemic and that restaurants will lose more than $240 billion by the end of 2020.