What the Stimulus Bill Means for Restaurants

3 Min Read By Pooja S. Nair

On Friday, March 26, 2020, the president signed the CARES Act, the largest stimulus legislation in U.S. history, into law.  The act provides some relief for restaurant owners in forgivable paycheck protection loans and tax relief.  The measures in the act are designed to incentivize keeping workers employed and businesses continuing to invest in business infrastructure and improvements.

Paycheck Protection Loans: Restaurants with fewer than 500 employees may borrow money through the Small Business Association (“SBA”) for a variety of costs related to employee compensation and benefits.  This includes payroll costs, compensation for employees making less than $100,000 annually, rent, continuation of health care benefits, and rent. 

The maximum loan amount is calculated by multiplying the average total monthly payroll costs of the business by 2.5, with a cap of $10 million.  Loans will be provided at an interest rate of or under four percent.  If the business spends the loan…