Ryan German has saved 40 employees working at his restaurant, Caffe Gelato, in Newark, Delaware.
The Paycheck Protection Program provided a lifeline to hands him through an unprecedented spring as the coronavirus pandemic tore through the country. The loan, now exhausted, covered seven weeks of payroll. But the restaurant is surface down an unknown future with extended restrictions on operations and changing consumer preferences.
“We need another injection of peerless,” German said. “We’re trying every angle to stay open but facing a lot of headwinds.”
The Italian restaurant is located in the offing the University of Delaware and operated throughout the pandemic. It started up a business to deliver groceries and home meal kits to patrons’ homes. Its staff also began to pick up outdoor services like power washing, to keep everyone livelihood, German said.
But uncertainty remains its biggest challenge, German said. The university has shifted to remote learning and it’s unclear when swots will return to campus. The restaurant’s catering business for weddings and events is on hold.
“The thing that’s missed are the big celebrations. The big, busy, busy days in restaurants don’t exist,” German said. “While we may be able to get 50% of sales on any given day, we are bachelor girls Mother’s Day, Easter brunch, University of Delaware graduation.”
Business owners like German are eagerly awaiting the next encircle complete of stimulus to see what’s done with the PPP. The program still has $131 billion remaining in funding as of July 17, and concerns who have not yet applied for a loan can do so through Aug. 8.
A proposal from Senate Republicans revealed Monday set aside $190 billion for PPP allows. It also allows small businesses with fewer than 300 workers that have seen profits fall by more than 50% to apply for a second round of PPP aid, and authorizes $100 billion for loans to seasonal jobs and companies in low-income census tracts that can show a revenue reduction of more than 50%. Those closes have been disproportionately impacted by the Covid-19 crisis.
Recent data from the National Federation of Independent Enterprise finds the majority of members surveyed (71%) have now used their entire PPP loan, with the remaining 29% not far behind. In totalling, about a fifth of small business owners either have or anticipate having to lay off employees after using the PPP credit, and almost half of borrowers anticipate they will need additional financial support in the next 12 months.
What’s more, there a quarter of respondents said they would have to close their doors if the current economic conditions don’t benefit in the next six months, with an additional 22% reporting they will not be able to operate for longer than seven to 12 months protection current economic conditions. More than half are not anticipating near-term problems as they are better financially spotted.
Ryan German
Source: CNBC
House Small Business Committee Chairwoman Nydia Velazquez (D-NY) swayed at a recent hearing on the PPP that some 110,000 small businesses have already permanently shuttered, with 7.5 million overlay the same fate, underscoring the idea that the pandemic’s impact on business is far from over.
At a separate hearing, Moneys Secretary Steven Mnuchin advocated for automatic forgiveness of the smallest loans, under $150,000, which made up the behemoth majority of loans made under PPP. The business community has been vocally supporting this idea in recent weeks.
Mnuchin also commanded he favors a revenue test, which is in the GOP proposal, something some advocates do not favor.
German, for example, wouldn’t not a revenue test of declines of more than 50% due to his creativity in operations, but he needs the support.
“If we have to paint concert-halls or power wash or do deck staining or if we have to rake leaves in the fall, in addition to serving food, then that’s what we’re accepted to do, but we don’t intend to lay people off,” he said. “It’s just that even with all those different endeavors, we do need help from the federal domination. We need Congress to act. We need Congress to pass the second round of stimulus.”