Restaurant Association Says More Help for the Industry Is Needed

After the pandemic passes, the National Restaurant Association warns, nearly all American restaurants will be 'in desperate need of cash.'

By Cooper Levey-Baker April 13, 2020

The Gecko's Grill & Pub on Hillview Street in Sarasota, before the COVID-19 pandemic.

Image: Chad Spencer

Since March 1, an estimated 3 million restaurant employees have lost their jobs and, the National Restaurant Association warns, a total of 7 million workers will lose work before the COVID-19 pandemic is over. Overall, the association estimates that restaurants will lose $225 billion in revenue in just March and April, and that 15 percent of restaurants have closed or will close permanently in the next two weeks.

To combat those losses, the association is calling for economic help from the federal government that goes beyond the coronavirus relief act passed by Congress last month. That law set aside $349 billion in loans for small businesses, some of which could be forgiven. Restaurant owners, as well as other small business owners, have expressed concern about the details of those loans, and the association warns that restrictions on how that money can be spent, like a rule that requires that 75 percent of the loan must be spent on payroll in order to be forgiven, have discouraged some restaurants from participating.

In addition to changing those rules, the association is also calling for additional funding for the loan program, as well as adjustments to how Economic Injury Disaster Loans are administered and an expansion of the Employee Retention Tax Credit.

"The severity of this pandemic has made it clear that restaurants will remain closed - or severely curtailed in service - for far longer than originally anticipated," writes Sean Kennedy, the National Restaurant Association's vice president of public affairs, in a recent letter to Congress. "Once 'normal' operations resume, virtually every restaurant in this country, from the favorite diner to the local icon, will be a virtual startup in desperate need of cash."

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