Business & Lobbying

Restaurant group presses Congress to back off certain PPP changes

The National Restaurant Association is calling for Congress to back off imposing new restrictions to the Paycheck Protection Program (PPP) that would include a revenue reduction threshold in the next coronavirus relief package.

The Senate Republicans’ bill, released last week, included a provision that would limit the loans to businesses that have lost at least 50 percent of their revenue compared to a previous year’s quarter.

The National Restaurant Association wrote in a letter to congressional leadership on Monday that if the threshold is lowered to a 20 percent reduction, 430,000 restaurants could qualify for a second loan. 

“While this is appropriate for many businesses, a restaurant’s tight profit margin means that even a small reduction in gross receipts can push them into bankruptcy. The proposed threshold would deny access to 55 percent of restaurants, including countless ones struggling to stay open,” Sean Kennedy, executive vice president of public affairs, wrote.

Democratic leadership, Treasury Secretary Steven Mnuchin and White House chief of staff Mark Meadows are set to meet Monday to continue negotiations over a fifth coronavirus package. The $3 trillion House-passed HEROES Act, which Senate Republicans declined to take up, includes the same 50 percent restriction.

The association also called for Congress to codify that PPP loans would be deductible from federal taxes. 

Nearly 100,000 restaurant indoor operations have been shut down a second time by government mandate as of July. The association estimates the industry will lose $240 billion in revenue this year.

Tags Coronavirus Mark Meadows Paycheck Protection Program PPP loans Restaurants Small business Steven Mnuchin
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