This morning the White House announced than the $ 350 billion allocated to the Small Business Administration Paycheque Protection Program (PPP) is completely exhausted. Moreover, the separation Economic disaster loans (EIDL) also lacks funds. This means that many Houston area restaurant and bar owners will continue to face tough financial times. They will be faced with tough decisions about how to help their employees, make lease payments, pay utilities and suppliers, or even be able to pay personal bills. While many of them shifted to delivery and take-out, that income did not make up for the losses caused by closed dining rooms and door-to-door orders. Many had asked and hoped that these new federal programs would provide much-needed relief, but many did not even get an update on the status of their loan applications, let alone receive any money.
âI requested the EIDL as well as the advance and the PPP. We received a total of ZERO dollars, âwrote Caroline cobell of Caroline’s – A healthy restaurant in spring. âI applied as soon as the portals opened. I have no idea how they determine who gets money and who doesn’t. It is certainly not in our favor. My bank told me that our request had been in pre-subscription for a week.
âWe applied to EIDL through the SBA [Small Business Administration] online portal but could not do so for the PPP. We have been “online” to submit the application for a few weeks, “said Robin nouu, Owner of Robin’s Snowflake Donuts & CafÃ© in spring. âYesterday they sent an email saying we are next in line and we can now apply online. It is extremely frustrating. No communication from the SBA or our bank.
Thomas tang of Samurai noodles received communications from Chase Bank today, but that was not good news. It was a call confirming that there was no more loan money available and that his request would not be funded. This is despite the fact that he applied on the first day it was possible to do so.
Ashok rao, Owner of Thai Songkran Cuisine at Uptown Park, is another owner who applied ASAP, but to no avail. âI was one of the very first to integrate my PPP application at Chase Bank. Banker Chase SBA told me this is the most comprehensive and comprehensive app she has worked on. She said everything was ready and I should see my loan in a few days. It was last Wednesday – eight days ago – and I heard nothing more. I haven’t met anyone – not a single soul – who claims to have received their loan. My question, to paraphrase Pierre, Paul and Marie, is: “Where have all the PPPs gone?” “”
Initially, when the CARES Law – which established the PPP and EIDL programs – was adopted, the apparent intention of Congress was that the loans be intended for small businesses with less than 500 employees. However, the SBA has issued interim rules that open amenities to restaurant and hotel chains with no more than 500 employees by location. Subsequently, the big restaurant chains received huge sums of PPP funds. Ruth’s Chris Steakhouse received $ 20 million in loans, and Belly got $ 10 million.
Some small independent restaurateurs now think the odds of getting government help have never been in their favor. âThe interim SBA rules have opened the floodgates for big chains with good lawyers and multi-million dollar relationships with the banks,â said Gerry Sarmiento, Owner of Mezzanotte in Cypress. âIn this scenario, the process was much more chain-driven. I can’t imagine a “small” restaurant with 499 employees in one location. Like many others, Sarmiento asked for help and did not even receive an update from his bank on the status of his request.
These issues are in addition to the fact that the Paycheck Protection Program has never been a good option for many restaurants and bars in the Houston area. On March 16, Harris County Judge Lina Hidalgo ordered bars and restaurants to close to help reduce the spread of COVID-19. The only option left for restaurants was to move on to pickup and delivery. This meant that many owners had to immediately lay off staff in response to drastic cuts in their income.
However, a requirement of PPP is that beneficiaries must retain their staff. Since owners have no idea when they will be allowed to resume full service and have already laid-off employees, the program may not be of much help to many. What is really needed for restaurants and bars to exist until the restrictions are lifted is money to pay the bills.
In addition, several Houston restaurant owners, including Nouu, told Houston Food Finder that they were being blocked by the banking tactics described in an article on the. SmartAsset website: âEven before that, borrowers were blocked by banking restrictions, such as having to already be a business client with an existing deposit or credit account. Some banks required applicants to have a bank account and a loan, business credit card, or business line of credit.
Will there be more funds allocated for distribution by the SBA, and will it be strictly allocated to actual small businesses rather than large corporations? So far, no one knows. Democrats and Republicans are currently deadlocked on the provisions of a new financing bill. At this point, it seems every business and organization is in desperate need of the money. Same the governors of both parties ask for money to keep their short administrations afloat.
With emergency loan funds depleted, some of the best help restaurateurs can receive today comes from customers, who still have the financial resources, to place delivery and take-out orders, and various local efforts to help local consumers. hotel workers.