COVID-19: What the $2 Trillion Stimulus Package Means for the Foodservice Industry
hefs, restaurateurs, local restaurant associations, restaurant and foodservice workers and others have banded together during the COVID-19 crisis to push Congress to offer relief for struggling businesses and out-of-work staff.
Thanks to their efforts, and to the efforts of other industry stakeholders, the House and White House passed a Senate-approved, $2.2 trillion stimulus package, which includes various provisions specifically for restaurants and foodservice operations, unemployed workers and small businesses.
The Coronavirus Aid, Relief and Economic Security (CARES) Act saw a majority vote in the Senate and includes the following top-line provisions:
- $349 billion in cash flow assistance through 100% federally guaranteed loans to small businesses and 501(c)(3) nonprofit organizations (less than 500 employees per physical restaurant or foodservice unit), with a loan coverage period from February 15 to June 30 to be used to cover payroll, sick leave, health care benefits, mortgages/rent and/or utility payments (with the restriction of salaries above $100,000 a year and a cap of $10 million).
- Loan forgiveness equal to the amount spent by the borrower during an eight-week period after the origination date of the loan on payroll costs, interest payment on any mortgage incurred prior to February 15, 2020, payment of rent on any lease in force prior to February 15, 2020, and payment on any utility for which service began before February 15, 2020.
- Qualified Improvement Property (QIP) – businesses will be able to immediately write off costs associated with improving facilities instead of having to depreciate those improvements over the 39-year life of the building.
- Refundable employee retention payroll tax credit (ERTC) for 50% of wages paid by employers to employees subject to closure due to coronavirus.
- $5 billion in Community Development Block Grants (CDBG) to enable nearly 1,240 states, counties, and cities to rapidly respond to coronavirus and the economic and housing impacts.
- Deferred employment tax to be paid over the following two years, with half of the amount required to be paid by December 31, 2021 and the other half by December 31, 2022.
- Tax filing deadline extension from April 15 to July 15.
Check out the National Restaurant Association’s complete summary of the CARE act.
Stay tuned for more updates on WeAreChefs.com.