A Second Round of PPP loans for distressed sectors, such as hospitality, restaurants, travel, and tourism. Secretary Mnuchin said another economic stimulus will likely be needed and it should target those industries that are undergoing the most challenges. We’ve lost 3X the number of jobs as any other sector, We continue to struggle with capacity restrictions and lackluster demand for dine-in, and costs are piling up to operate in the COVID-19 era. Think of this as a targeted recovery fund for our sector!
Tax Deductibility of forgiven PPP loan expenses on payroll, rent, mortgage interest, and utilities. The IRS said these expenses, when paid with forgiven PPP loan funds, are not tax deductible. This would leave small businesses with a massive tax liability at a time when liquidity is already extremely challenged. The IRS notice (2020-32) also runs counter to congressional intent behind the CARES Act. Senator Cornyn is sponsoring bipartisan legislation to fix this issue - S. 3612. I know as you are reading this you are thinking “you must be kidding me." I wish! This is why we need to get this bill passed as well. We will have a chat with Cornyn’s team tomorrow to get an update on the bills progress.
MB Permit Fees: Today we reiterated our request to Governor Abbott for a waiver to allow TABC to accept payment plans from restaurants and bars that have been negatively impacted by COVID-19 and need to renew their alcohol license this year. We aren’t asking for a fee waiver, just more time for our restaurants and bars to get back on their feet.
Alcohol To-Go. We also reminded Governor Abbott’s team of our ongoing request to expand the existing alcohol to-go waiver for the duration of the recovery. This is an easy win that would be very helpful to restaurants now. We’re hearing from more and more stakeholders in the alcohol industry who agree it could help everyone, regardless of their place in the three-tiered system. We continue to advocate for the waiver to remain in place for the duration of the recovery and that it be expanded to include:
Retro-fit Restaurants: The reality is most of you are having to make changes to your restaurants to accommodate more to-go, delivery or other opportunities to bring in more revenue. This costs money, along with the cost of sanitation, cleaning and PPE. We are asking Governor Abbott for $390M so we can provide grants to help cover costs like this. We have to get louder here and message why this matters. Please send this link to your friends and post all over social media. I know we need this relief but with so many asking for support, we need to be the loudest industry.
Today included defending our sector from media who want to highlight every restaurant that has a positive COVID-19 case to drive clicks and engagement for their own financial gain. This behavior is beyond unfair and, worse than that, it hurts an industry already brought to its knees and owners and employees who are going above and beyond to keep their guests and each other safe. There is so much pain and fear and to have individuals and companies exploiting that gives me pause to consider if we are all really in this together.
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The House passed bipartisan legislation Thursday to give small businesses more flexibility with the loans they received during the coronavirus pandemic to keep their businesses afloat.
The Paycheck Protection Program (PPP) Flexibility Act, authored by Rep. Dean Phillips, D-Minn., and Chip Roy, R-Texas, passed with a 417-1 vote and now heads to the Senate.
"Millions of small business owners in this country are one step closer to meaningful relief," Phillips tweeted after the near-unanimous vote. "This is what's possible when leaders listen, act and collaborate.
During the pandemic, Congress allocated $659 billion to small businesses in PPP loans that could be converted to grants if they met certain requirements. The new legislation loosens some of the restrictions on the loans that businesses found too burdensome given that many are still closed or operating at reduced capacity due to prolonged stay-home orders. The legislation extends the time to use the money from eight weeks to 24 weeks. The bill eliminates the cumbersome 75/25 restrictions that forced businesses to spend 75 percent of their loans on payroll and only 25 percent on other operating expenses like rent and utilities. The formula changes to 60/40 percent. For loans that aren't forgiven, businesses would have more time for repayment, from two years to five years.
Some San Antonio groups wanting to provide assistance to very small local businesses seeking federal stimulus money turned to bankers at Frost Bank for tips. They are targeting businesses with fewer than 50 employees.
On a conference call Thursday, Frost Bank CEO Phil Green and other bank officials shared the ins-and-outs of the Paycheck Protection Program — a stimulus program run by the Small Business Administration that is distributing millions to small businesses to use for payroll and other expenses like rent and utilities.
“We applied the things that we learned from the very strenuous process of applying for those PPP loans through the SBA and kind of put a presentation together,” Frost spokesman Bill Day said. Frost Bank was among the banks that processed the most loans in San Antonio during the PPP’s first round of funding, which provided $349 billion to businesses last month. The second round, with $310 billion, is under way.
On March 27, when both branches of Congress and the White House came to an agreement to provide sweeping financial assistance via the $2.2 trillion CARES Act, many of us in the restaurant industry cheered with a big sigh of relief. This pandemic, and the consequential shut-down of an entire industry that relies upon the gathering of people - at a moment when people cannot gather- had already shown that no restaurant is unsinkable. With slim margins in our industry to begin with, restaurants of all sizes and flavors were vulnerable and laying off people by the hundreds. Indeed, both Shake Shack and Union Square Hospitality Group needed to make those tough decisions too, furloughing or laying off hundreds of team members throughout our respective companies—one a publicly traded company, the other an independent restaurant group.
Restaurants function as the lifeblood of the U.S. economy and the nation's spirit. The bulk of the over $800 billion that restaurant-goers spend on dining out flows right back into the economy with much of that impact going to the very small businesses this PPP loan was intended to reach. The CARES Act was touted as the largest economic stimulus package in U.S. history and on its initial face, for restaurants, there seemed to be a lot to like in the bill.
With the country facing a prospective permanent loss of restaurants up and down the food chain, the bill arrived just in the nick of time. The onus was placed on each business to figure out how, when, or even if to apply. The “PPP” came with no user manual and it was extremely confusing. Both Shake Shack (a company with 189 restaurants in the U.S., employing nearly 8,000 team members) and Union Square Hospitality Group (with over 2,000 employees) arrived at a similar conclusion. The best chance of keeping our teams working, off the unemployment line and hiring back our furloughed and laid off employees, would be to apply now and hope things would be clarified in time.
The PPP funds are exhausted. Time for Plan B. National Small Business Town Hall #4
Learn from the expert panelists about where the CARES Act is at as of 4/17 and hear answers to small business owner's burning questions including: Where to go from here? How to use the funds? Explaining the fine print?
Texas leads the country with the most approvals for the U.S. Small Business Administration’s Paycheck Protection Program as of April 13, according to SBA data obtained by the Texas Bankers Association.
Texas has approved 88,434 loans totaling $21.77 billion, as of April 13.
California followed behind Texas, having approved 54,922 PPP applications totaling $20.85 billion in loans, as of April 13. Florida ranked third, having approved 52,021 loans totaling $12.65 billion.
Overall, the average loan size is about $239,152, according to the data.
Jenna Saucedo-Herrera, president and CEO of the San Antonio Economic Development Foundation, answers your questions on KSAT.
Governor’s Small Business Series Webinar to be held 1:00pm - 2:00pm on Wednesday, April 15, 2020. Participation in the Webinar is FREE. The Governor’s Small Business Series Webinars provide Texas small business owners and entrepreneurs with timely, relevant, actionable information on the COVID-19 recovery resources such as Paycheck Protection Program, EIDL Loan Advance, SBA Express Bridge Loans, and SBA Debt Relief. Businesses will also get the chance to connect with local experts and support systems. Click here to Register
Knight Talks: Town Hall with Roy and Crenshaw Thursday, April 16 8:00 p.m.
Many of the questions we're hearing in Texas are related to the Paycheck Protection Program (PPP), when to anticipate more help from the government, options for taking care of employees, and business interruption insurance. Join us for a virtual town hall meeting with Dr. Emily Williams Knight, President & CEO of the Texas Restaurant Association; Representative Dan Crenshaw (TX District 2); and Representative Chip Roy (TX District 21). Click here to Register
The Paycheck Protection Program (“PPP”) is the crown jewel of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The CARES Act allocates $349 billion to the PPP loan initiative in an effort to stabilize small businesses during the COVID-19 outbreak and to allow them to retain their workforces while weathering the Coronavirus storm. But while $349 billion is a staggering number, it is unlikely to be enough to satisfy the demand for capital. The appropriated funds will go fast, and it is a first-come, first-served program. Indeed, reports are already indicating that Treasury Secretary Mnuchin is seeking an additional $250 billion for the PPP loan program.
Applications for PPP loans were available for submission on April 3rd. Processing began in earnest for small businesses and sole proprietorships this week. The U.S. Small Business Administration (the “SBA”) is opening up applications for independent contractors and self-employed individuals starting April 10th. The PPP gold rush is on and there is plenty of confusion and chaos to go with it. With many PPP borrowers having received their loan proceeds, or receiving them soon, what should borrowers be doing after receiving their loan? Here are five things that need to be on that list according to Forbes,
Friday, April 3 was the first day small businesses and sole proprietors could apply for Paycheck Protection Program (PPP) loans. That day, Inc. editor-at-large Kimberly Weisul spoke with U.S. Chamber of Commerce executive vice president and chief policy officer Neil Bradley as part of the National Small Business Town Hall webinar series. Here are some of the most popular questions Inc. readers submitted during the town hall, along with answers from Bradley and other experts.
Inc. and the Chamber will hold its third town hall in the series Friday, April 10 at 12 p.m. Eastern. Registration is now open.
1. Which lenders are accepting applications for PPP loans?
The loans are being made available using a tiered rollout system, with traditional Small Business Administration lenders being the first institutions that can accept applications. Other financial institutions--including credit unions, Farm Credit System institutions, and Community Development Financial Institutions (CDFIs)--are now in the process of being added and will begin accepting applications in the coming days--if they haven't already.
National Small Business Town Hall for Small Business Owners (Inc. and the U.S. Chamber of Commerce) Webinar - Urgent Updates: Answers to Crucial New Questions Around the Stimulus Bill (click here)
Find out answers to:
The speakers, Tom Sullivan, U.S. Chamber of Commerce, Vice President Small Business Policy, and C. E. "Tee" Rowe, President and CEO of America's Small Business Development Centers, provided essential feedback on:
How the Paycheck Protection Program is different from an economic injury disaster loan
Who is eligible?
In order to qualify for an SBA economic injury disaster loan, a business must prove substantial economic injury – that it is unable to pay its ordinary and necessary operating expenses. The point of the loan is to help a business ride out a disaster period until normal operations can resume – it applies to situations where there is no physical damage.
In order to qualify for PPP, a business must have less than 500 employees and be affected by the coronavirus. Businesses in certain industries may have more than 500 employees if they meet the SBA’s size standards for those industries.
PPP is designed to incentivize companies to keep employees on staff. It is expected to move cash more quickly than the SBA’s other program, for faster economic relief.
Governor Abbott Requests Emergency Designation For Small Business Disaster Loans From U.S. Small Business Administration
Governor Greg Abbott today requested designation from the Small Business Administration (SBA) Economic Injury Disaster Declaration in order to access the Economic Injury Disaster Loan (EIDL) program for the entire state of Texas. If granted, the SBA would provide long-term, low-interest loans to qualifying businesses across the state.
“At a time when small businesses are hurting from the economic impact of COVID-19, the State of Texas is committed to helping these businesses receive the financial relief they need to continue operating,” said Governor Abbott. “That is why today I requested that the U.S. Small Business Administration implement a declaration to provide SBA Economic Injury Disaster Loans for the entire state of Texas.”
All small businesses who believe they may be eligible for an SBA EIDL should visit the Texas Division of Emergency Management (TDEM) website: https://tdem.texas.gov/covid-19/. They will be directed to the SBA website where they can apply for assistance.
Find local SBA offices, women's business center, and business mentors for the San Antonio area.
Capital Access – Incidents can strain a small business's financial capacity to make payroll, maintain inventory and respond to market fluctuations (both sudden drops and surges in demand). Businesses should prepare by exploring and testing their capital access options so they have what they need when they need it. See SBA’s capital access resources.
Workforce Capacity – Incidents have just as much impact on your workers as they do your clientele. It’s critical to ensure they have the ability to fulfill their duties while protected.
Inventory and Supply Chain Shortfalls – While the possibility could be remote, it is a prudent preparedness measure to ensure you have either adequate supplies of inventory for a sustained period and/or diversify your distributor sources in the event one supplier cannot meet an order request.
Facility Remediation/Clean-up Costs – Depending on the incident, there may be a need to enhance the protection of customers and staff by increasing the frequency and intensity by which your business conducts cleaning of surfaces frequently touched by occupants and visitors. Check your maintenance contracts and supplies of cleaning materials to ensure they can meet increases in demand.
Insurance Coverage Issues – Many businesses have business interruption insurance; Now is the time to contact your insurance agent to review your policy to understand precisely what you are and are not covered for in the event of an extended incident.
Changing Market Demand – Depending on the incident, there may be access controls or movement restrictions established which can impede your customers from reaching your business. Additionally, there may be public concerns about public exposure to an incident and they may decide not to go to your business out of concern of exposing themselves to greater risk. SBA’s Resources Partners and District Offices have trained experts who can help you craft a plan specific to your situation to help navigate any rapid changes in demand.
Marketing – It’s critical to communicate openly with your customers about the status of your operations, what protective measures you’ve implemented, and how they (as customers) will be protected when they visit your business. Promotions may also help incentivize customers who may be reluctant to patronize your business.
Plan – As a business, bring your staff together and prepare a plan for what you will do if the incident worsens or improves. It’s also helpful to conduct a tabletop exercise to simulate potential scenarios and how your business management and staff might respond to the hypothetical scenario in the exercise. For examples of tabletop exercises, visit FEMA’s website at: https://www.fema.gov/emergency-planning-exercises
SBA is focused on assisting with the continuity of operations for small business contracting programs and small businesses with federal contracts. For more information on federal contracting, visit https://www.sba.gov/federal-contracting/contracting-guide
8(a) Business Development program - serves to help provide a level playing field for small businesses owned by socially and economically disadvantaged people or entities, and the government limits competition for certain contracts to businesses that participate. The 8(a) program offer and acceptance process is available nationwide, and the SBA continues to work with federal agencies to ensure maximum practicable opportunity to small businesses. 8(a) program participants should stay in touch with their Business Opportunity Specialist (BOS).
HUBZone program - offers eligibility assistance every Thursday from 2:00-3:00 p.m. ET at 1-202-765-1264; access code 63068189#. Members of the HUBZone team answer questions to help firms navigate the certification process. For specific questions regarding an application, please contact the HUBZone Help Desk at firstname.lastname@example.org.
Women-owned Small Business firms- who have questions, please visit www.sba.gov/wosbready or write to email@example.com.
Is your question not addressed in these resources?