The Independent Restaurant Coalition (IRC), a group supported by 3,500 independent restaurant operators and chefs, on Monday sent a letter to Congress urging changes in the Coronavirus Aid, Relief and Economic Security (CARES) Act to meet their immediate financial needs.
In a follow-up conference call led by restaurateurs Tom Colicchio, Naomi Pomeroy and Kwame Onwuachi, the group not only expressed the need for a more comprehensive short-term relief package but also help for independent restaurants to reopen and stay open in the long term.
“We are not looking for a bailout,” said Colicchio. “We are looking to get back to work and make sure we can stay in business,” adding that restaurants are anchors in many communities, and emotionally, people will need them as a place to go when this subsides.
The IRC requested several changes to the CARES Act, especially as it applies to smaller operators.
Fixing the Paycheck Protection Program. The coalition is asking that the maximum loan amount be extended to three months after restaurants can legally open and for an extension on the loan repayment program. In its original draft, the bill gave operators 10 years to repay their loans at 4% interest, said Pomeroy. In its final form, repayment must be made in two years at 1% interest. Included in this request is a reinstatement of the $500 million gross revenue cap.
Launching a Restaurant Stabilization Fund that provides up to $100 billion in grants to independent restaurants that will give them the upfront capital they need to reopen. The loan program currently in effect has not treated all applicants equally. Some banks give priority to those operators that already have a credit line. And Onwuachi noted that immigrants can be at a disadvantage when it comes to filling out the application. Some banks and grant programs have already closed the application process due to an overload of requests.
Creating new tax rebates that incentivize employment so restaurants can continue to employ full staff, retain their lease and pay rent when business is slow. The restaurateurs agreed that it will take some time to ramp up business again; Pomeroy predicts that 2020 will be a wash and 2021 will still be a struggle for smaller operators.
Ensuring business interruption insurance covers COVID-19. Right now, restaurants aren’t receiving the benefits they deserve from insurance companies. As Colicchio pointed out, a virus doesn’t cause any physical damage to a restaurant, and some business interruption policies cover only damage from tornados, hurricanes and the like.
The IRC was created to advocate for smaller restaurants in the wake of the coronavirus crisis. Although the National Restaurant Association represents all restaurants big and small, “this is a way for us to amplify independent voices,” said Colicchio. “Not only restaurants owned by well-known chefs, but the small mom and pops as well.”