Photo courtesy of Good City Brewing
Good City Brewing's patio
A new bill has finally addressed the problems the Paycheck Protection Program (PPP) of the CARES Act posed for the hospitality industry and other small businesses. As originally written, the terms of PPP grants were too restrictive for independent restaurants to take full advantage of. Many economists, industry groups and restaurateurs raised the alarm that restaurants would not be able to hire back most of their staff within two months of being granted the loan, for example, which became clearer as the pandemic shutdowns have now dragged on into their third month.
On June 5, the Paycheck Protection Program Flexibility Act was signed into law and includes a number of fixes to the PPP’s largest problems.
- It reduces the proportion of the loan that is required to be used on payroll from 75% to 60%. This is especially important for restaurants that are operating at less-than-full capacity but have to restock all their food supplies and pay back lines of credit from suppliers, landlords and other overhead. Restaurants cannot be fully operational at the flip of a switch, unlike other industries.
- It extends the amount of time the loan must be spent from eight to 24 weeks. If you're a restaurant that applied for a PPP loan immediately after they became available, your eight-week period is already up. That’s a problem when most restaurants in the area are operating at reduced capacity or have not opened their dining room at all.
- It extends the payback period of the loan from two to five years if a borrower doesn't meet the requirements to convert all or part of the loan into a grant.
- It extends the deadline for hiring back employees to December 31. That's crucial for restaurants that are not fully operational yet to even have a chance at converting the loan into a grant.
Though the bill passed through Congress almost unanimously, our own Ron Johnson originally blocked the bill because the deadline to apply for loans could be interpreted as being extended through the end of the year instead of ending June 30. The bill was passed as is, but Johnson insisted that a letter be entered into the record stating that applications will only be accepted until June 30. Wouldn’t want those independent small businesses to get more help than they need, now would we?
Reopening Announcement Brings Out the Best—and Worst—in Restaurants
The City of Milwaukee’s surprise announcement last week that restaurants can reopen at reduced capacity came with less than a 24-hour notice and no indication that it was on the horizon, catching restaurant owners off guard. Earlier in the week a group of bars announced that they were planning to surreptitiously open for a period of time to protest the city's orders.
The announcement didn’t sit right with many hospitality industry folks who saw it as a way to distract people from the important Black Lives Matter and anti-police brutality protests that were peaking last weekend. Either it would take protesters away from their goals in order to go back to work in the service industry or getting back to dining out would distract people from the protests.
So, restaurants once again took a stand. Instead of opening haphazardly (remember, this isn't a flip-of-a-switch thing anyway), many kept their dining room closed in support of the protesters. Some did not mince words on why they were staying closed and their feelings about Mayor Barrett.
Other restaurants and restaurant groups have decided to stay silent about the current civil unrest, and their silence has been noted by customers who care. In a few cases, restaurants have even expressed their disdain for other restaurants that have chosen to stay closed because of the protests or pandemic concerns. Pastiche in Brown Deer, for instance, posted a long message on their Facebook page implying that restaurant owners who are choosing not to open are doing it as “an unfortunate grab at a little moment of free publicity” or “they’re not smart enough” to figure out how to run their businesses and should find another line of work.
The service industry is a tough business to survive in, especially during the last few months. What works for one restaurant may not work for another, but it’s safe to say owners and chefs will always do what they think is best for their business and customers.
