Large chains use C.A.R.E.S act

[SamSpade]

The big guys always find a way to get their cut...
Subsidiaries!

https://www.restaurantbusinessonline.co ... -ppp-loans

[klkla]

And yet a friend of mine that owns two independent restaurants with about 50 employees was told by his bank that there was no more money in the fund.

[storewanderer]

And yet a friend of mine that owns two independent restaurants with about 50 employees was told by his bank that there was no more money in the fund.

Keep following the money. This whole thing is nothing more than a shake out of small businesses. As I have pointed out in the retail thread why do Wal Mart and Target get to stay open selling items like clothing, fabric, etc. that other small businesses sell only those items and have been ordered closed? Absolutely disgusting what is happening here. And with the blessing of politicians on both sides of the aisle.

[storewanderer]

Let's hit a little more out of this article, it is a good one:

"Some restaurant operators have complained about a requirement that furloughed employees be rehired within eight weeks of the loan being awarded. Many establishments are completely closed or offering only takeout and delivery. Why ramp up staffing if sales are low or nonexistent? Yet failing to do so will threaten the forgiveness of their loans."

What if the state the restaurant is in still orders the restaurants closed in 8 weeks? Do they still have to pay their staff?

"The SBA has not revealed how much of the original $349 billion has been lent to date. Senate Majority Leader Mitch McConnell has already proposed the appropriation of another $250 billion for the program, but Senate Democrats blocked the measure, saying they would prefer a follow-up that provides assistance to hospitals and states.

Rep. Nancy Pelosi, speaker of the House of Representatives, and Sen. Chuck Schumer, the Democratic leader in that chamber, have since suggested that an additional $500 billion be channeled into the program."

And this bickering. This is a restaurant bill, not a hospitals and states bill. Fund the restaurant bill now and put in some protections so small operators are able to get access to the funds (since the big chains have in-house lawyers and support staff who can quickly apply and obtain funding, but it takes small operators longer to get things together and apply for these types of things), then get a separate bill for hospitals and states going. This money should have gone to small operators first as it is. It is a screw up in design that the big operators were able to pounce on this and as a result the funding got depleted this quickly.

[BillyGr]

"Some restaurant operators have complained about a requirement that furloughed employees be rehired within eight weeks of the loan being awarded. Many establishments are completely closed or offering only takeout and delivery. Why ramp up staffing if sales are low or nonexistent? Yet failing to do so will threaten the forgiveness of their loans."

What if the state the restaurant is in still orders the restaurants closed in 8 weeks? Do they still have to pay their staff?

Seems that the way that reads they have up to 8 weeks to do the rehiring. Thus, if a loan was approved this coming week, they wouldn't have to hire people back until around mid June (which would give them a fair amount of time to see what the plans were).

Even if they weren't allowed to be reopened at that point, they could still hire these people and pay them with what is basically free money (since that would allow the loan to be turned into a grant) - not so much different than the same people getting paid via unemployment (as the money is coming from basically the same place).



In terms of who gets the loans, it depends on how those "big" companies are structured. After all, some of the big restaurant chains have many locations (for some, most) that are franchises, so each franchise could be getting the benefit to pay their employees and, depending on which chain some of those franchisees are small.

Perhaps it also goes that most of the smaller local restaurant businesses are still operating, so perhaps they wouldn't all think of doing this as they are still getting business coming in (no way to know how much compared to normal - the few locally seem to have a decent amount but you can't easily compare as the parking lots look empty when people are there for just a few minutes to pick up vs. staying to eat for an hour or whatever).

[storewanderer]

Perhaps it also goes that most of the smaller local restaurant businesses are still operating, so perhaps they wouldn't all think of doing this as they are still getting business coming in (no way to know how much compared to normal - the few locally seem to have a decent amount but you can't easily compare as the parking lots look empty when people are there for just a few minutes to pick up vs. staying to eat for an hour or whatever).

The issue is the small local restaurant cannot act quickly. I have dealt with this issue the past couple weeks. The small local restaurant is already stretched to the max if open for take out with business down 90% and trying other creative things like selling grocery items trying to generate revenue with the owners taking a more active role in operations due to not being able to afford many employees since revenue has dried up. They hear about this loan and want to take a loan out. The loan is new and everyone is still trying to understand how it works. The restaurant owner in the middle of still trying to operate and get some cash flow, contacts their attorney to ask some questions, who is busy and there is a delay to get back to them. The attorney can't answer all of their questions and they then contact their accountant, who is also busy. Again another delay. Even if it is half a day or a day it makes a difference here. Finally once they get the information they need from the professionals and want to go forward, they go to contact their bank, who may or may not be participating in the program, and run around with that process until they find a participating bank. Some banks would only serve existing account holders. More time wasted. Then once they finally get an agreement from the bank, back to the attorney and possibly accountant again for more help interpreting the agreement. More time passes. Fund dries up. Politicians dicking around trying to add more funding but not withing adding even more funding to the existing bill for "states and hospitals," not restaurants, to the already poorly written and hastily passed bill and to add a cherry on top, certain political "leadership" screwing around on a late night talk show last night (the show was probably pre-recorded days ago, but still...) about ice cream rather than trying to get something going to fix this mess and provide immediate relief to the small businesses. Politicians are certainly entitled to some personal time but this is a really pressing matter to get additional relief funds to these small restaurant businesses.

[rwsandiego]

Let's hit a little more out of this article, it is a good one:

"Some restaurant operators have complained about a requirement that furloughed employees be rehired within eight weeks of the loan being awarded....

What if the state the restaurant is in still orders the restaurants closed in 8 weeks? Do they still have to pay their staff? ...

The loan program is called the "Paycheck Protection Program" for a reason. When the US government offers to forgive a "paycheck protection" loan the borrower should be required to re-hire and pay their employees with the money they borrowed, whether or not local rules require the business to remain closed.

...Senate Majority Leader Mitch McConnell has already proposed the appropriation of another $250 billion for the program, but Senate Democrats blocked the measure, saying they would prefer a follow-up that provides assistance to hospitals and states.

Rep. Nancy Pelosi, speaker of the House of Representatives, and Sen. Chuck Schumer, the Democratic leader in that chamber, have since suggested that an additional $500 billion be channeled into the program."

And this bickering. This is a restaurant bill, not a hospitals and states bill. Fund the restaurant bill now...

This is not a restaurants bill. The SBA's PPP program application requirements states the following application requirements:

The following entities affected by Coronavirus (COVID-19) may be eligible:

• Any small business concern that meets SBA’s size standards (either the industry based sized standard or the alternative size standard)

• Any business, 501(c)(3) non-profit organization, 501(c)(19) veterans organization, or Tribal business concern (sec. 31(b)(2)(C) of the Small Business Act) with the greater of 500 employees or that meets the SBA industry size standard is more than 500:

• Any business with a NAICS Code that begins with 72 (Accommodations and Food Services) that has more than one physical location and employs less than 500 per location

• Sole proprietors, independent contractors, and self-employed persons

In essence, the SBA is making an exception to the small-business requirements by allowing restaurants of any size, as long as the per-location employee count is fewer than 500, to apply.

...then get a separate bill for hospitals and states going.

Hospitals and states are specifically called out as beneficiaries of the C.A.R.E.S. act, as summarized on the U.S. Department of the Treasury website.

...This money should have gone to small operators first as it is. It is a screw up in design that the big operators were able to pounce on this and as a result the funding got depleted this quickly.

The vast majority of applications were from small businesses. One bank received more PPP loan applications in a week than it had received conventional SBA loan applications in the last 13 years. That said, workers at Ruth's Chris and landlords who own the buildings they operate in will be equally had-hit as the workers at and landlords of a local coffee shop.

[storewanderer]

It may not be so easy to hire back 100% of the employees within 8 weeks, but I guess they can get paid through these funds or paid through a State Unemployment Fund so this requirement ideally would take some stress off some of those State Unemployment Funds.

I know the large operators have employees too (probably a lot more employees per location than the small operators have) that are in the same boat as the small operators with this. But allowing them to pull from this is probably a big reason why the funding dried up so quickly. They were able to move quick and apply for the funding. The small businesses can't move that quick...

I fail to see how hospitals and states should be involved in this particular funding act. Or I should say, why additional funding for this fund's intended purposes should be "held up" so hospitals and states can be included in it. Put them under a different program, not this one, and do not hold additional funding under this program hostage. I am not going to say don't fund them, but don't muck this one up any further and delay appropriating additional funds to it, due to wanting to now include hospitals and states in it.

[storewanderer]

Let's see if any more chains "return the money."

https://www.cnbc.com/2020/04/20/mark-cu ... brand.html

I was reading the other night about some bakery in DC that tried to get $23k, filed an application on time (before the fund ran out) and was denied after a delay because the fund had run out, and was then unable to fulfill some 11,000 cake or pie order because they couldn't afford the labor to fulfill the order.

Meanwhile, still no additional funds for this yet as the politicians continue to argue over... who knows what.

Then there are the articles out there about the banks prioritizing the loans for larger businesses because they will get more application fee revenue from larger loans. So then as a result there was less money left for those like the bakery that needed $23k. Well of course that is how any business is going to do things... you prioritize and take care of the largest revenue customers first... that is simply a good business move.

What a show.