Relief for Struggling Restaurants: CARES Act 2020
On March 27, 2020, the federal CARES Act was passed to help address the unprecedented public health and economic crisis related to COVID-19. The law provides $300+ billion for Small Business Administration (SBA) loan guarantees and subsidies for small businesses, including restaurants. The CARES Act amends the Small Business Act, an already existing law allowing for federally guaranteed loans to “small business concerns,” or independently owned and operated businesses. Under the CARES Act, for the period February 15, 2020 to June 30, 2020, an eligible business may apply for a loan or secure government funding for your restaurant to help cover operational costs such as payroll expenses, healthcare benefits, salaries or similar compensation, rent and mortgage payments, and utilities.
What businesses are eligible to apply?
Small businesses that are eligible for a CARES Act loan are:
- Businesses with no more than 500 employees,
- Was in operation on February 15, 2020,
- Had employees for whom the business paid salaries and payroll taxes or paid independent contractors, and
- Can certify that the loan is necessary due to the uncertainty of current economic conditions caused by COVID-19
A business that meets these requirements is eligible to receive a loan for the lesser of $10 million or 2.5 times its monthly payroll costs. Loans will have terms set at a maximum of 10 years and interest rates are capped at 4% with interest payments deferred for 1 year. The loans may be eligible for partial loan forgiveness.
What does this mean for you as an independent restaurant owner?
You may be eligible to receive funds to help your small business through the impact of COVID-19. Visit U.S. Small Business Guidance & Loan Resources website or call the SBA at (800) 659-2955 to learn more about how to apply for a disaster relief loan to help your business. Because the CARES Act was passed on March 27, the SBA has not updated its website to include the provisions of the CARES Act. You may still want to apply immediately through the existing “Economic Injury Disaster Relief Program” to ensure you get access to funds.
At Rewards Network, we are here with you side by side through this COVID-19 crisis. We will see you and your business through this and partner with you all of the way.
