As proposals that would help small businesses survive coronavirus-related closings advance in Congress and the State Legislature, restaurant owners and workers scrambled for enough details to make decisions.
Richer unemployment benefits would even cover those not previously covered by New York unemployment insurance, with $600 per week on top of the base unemployment compensation benefit, “which ensures that workers who are laid-off or out of work, on average, will receive their full pay for four months,” according to a letter from Sen. Charles Schumer’s office.
More radically, “it ensures that all workers are protected whether they work for small, medium or large businesses, along with the self-employed and workers in the gig economy,” apparently anyone with a taxpayer number, though more explanation is needed.
Of particular interest to restaurant owners is a loan program that would convert to a grant if businesses maintain their payrolls for two months.
Restaurants and other small businesses closed by coronavirus can apply for a “forgivable, two-month loan for up to 125% of their monthly payroll costs to retain their employees and help cover other operating expenses like rent and utilities,” the Schumer letter said. “If you retain your payroll for two months after receiving the loan, the loan is forgiven, essentially becoming a grant.”
If some, or all, of the loan is not forgiven, payments are deferred until a year after the loan is made, when it converts to a 10-year loan at 4% or less.
“It definitely sounds good,” said James Roberts, owner of closed restaurants Toutant and Dobutsu, who was interrupted while cleaning out prepped food he had to throw away. “I mean it's gonna save a lot of places” – as long as there’s no devil hidden in the details.
Three other restaurateurs reached Wednesday afternoon were optimistic but unwilling to say anything publicly until the details, ramifications and dollar value of the proposals were clearly expressed by officials.
“It sounds good, but if I jump too soon can I send you the bill?” one asked by way of response. “Put it on paper I can show my lawyer and we can talk.”
Would the measure pay for restaurant staffs to stay home, not obligate the owner to keep business up and running to turn out food? That question was presented to Sen. Schumer’s office, but there was no response by 4:45 p.m.
The bill would sweeten Small Business Administration loans, by adding a $10,000 grant to help for operating expenses before the loan kicks in. (Restaurateurs have previously downplayed loan usefulness at 3.75%, so that might change the math for some.)
Any business owner who already has an SBA loan will have of six months of payments on principal, interest and fees waived, if the bill passes.
Democrats, who had earlier rebuffed a Republican Senate proposal as weak on aid to families, workers and small businesses, agreed with Majority Leader Mitch McConnell’s team on substantial details of the deal released Wednesday morning.
Minor details remain to be worked out, both sides said, expressing optimism it would be voted on tonight, head to the House on Thursday, then the White House for a potential signature by the weekend.
In the New York Senate, the Judiciary Committee was considering S8125, a bill that would suspend “all rent payments for certain residential tenants and small business commercial tenants if such tenant has lost employment or was forced to close their place of business and certain mortgage payments for landlords of such tenants in the state for 90 days following the effective date of this act in response to the outbreak of coronavirus disease 2019.”
In the proposed legislation, "small business" is defined as 100 employees or fewer.