Colorado restaurants have new sources of federal financial assistance, thanks to the CARES (Coronavirus Aid, Relief and Economic Security) Act passed by Congress and signed by President Donald Trump on March 27. Two items in the bill were included specifically to give relief to restaurants and other small businesses, according to Denver restaurateurs who were on a conference call with Senator Cory Gardner immediately after the bill was passed.
"We are primarily talking about loan programs," says Chad Michael George, co-owner of the Way Back (at 3963 Tennyson Street) and president of independent restaurant network EatDenver. One of those programs comes with no interest or penalties, he notes, and is essentially a "loan forgiveness program."
The call included Gardner; the senator's chief counsel, Brian Wanamaker; and about twenty members of EatDenver and the Denver restaurant community. Gardner and Wanamaker explained the bill and talked about the things the senator was doing to protect Colorado businesses, including fighting for a larger amount that restaurants could apply for from the new paycheck protection loan program than what actually made it into the bill, George says.
Juan Padro, co-owner of the Tap & Burger group, Bar Dough, Señor Bear and several other Denver restaurants, explains that the paycheck protection loan program is based on a restaurant's monthly payroll expenses (including actual employee wages, as well as health insurance, taxes and other payments). "The idea is that it's an incentive to hire people back at full or at least a fair portion of their original income," Padro notes.
The multiplier in the bill allows the restaurant owner to apply for 2.5 times its total monthly payroll, but according to both George and Padro, Gardner was shooting for a multiplier of 4. During the call, he said that he'd be heading back to Washington, D.C., to try and get that number increased now that the bill has been signed into law.
The details of the payroll protection loan, Padro adds, include no interest or fees at the end of the eight weeks that the money is intended to cover, and up to $10 million per loan — which far exceeds what most Denver restaurants could qualify for.
The second loan provision in the CARES Act is an extension of the Small Business Administration’s Economic Injury Disaster Loan (EIDL) program, originally designed for rural areas hit by natural disasters such as floods and tornadoes. Padro says that Gardner helped get two requirements of the existing EIDL program waived in the new bill to make it easier for restaurants to qualify for the loans, which carry 3.75 percent interest over a thirty-year term and are backed by the U.S. Treasury. As Padro understands it, a restaurant could take advantage of both loans at the same time, as long as the funds are used for different purposes; the FDA has deferred the first six months of payments for those who qualify.
Padro has been on several calls with Gardner, so he says he'd become familiar with what's available; the best thing for others to do is read the wording of the bill and decide if taking on additional debt is the right course. Applications can be filled out on the SBA's disaster assistance website.
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This isn't Padro's first encounter with a major disaster. He has family in Puerto Rico, and traveled to the island to help with relief efforts in the aftermath of 2017's Hurricane Maria. Although the current pandemic is a much different kind of disaster, he says that working with people on the ground in Puerto Rico helped him understand the full impact to those affected. "One thing you focus on is your people. This is a mental health issue as well," he notes.
So far, Padro has been able to retain about 100 employees and offer assistance to those laid off. "I'd say we were super-prepared," he explains.
"Even before Mayor Michael Hancock made his announcement [closing restaurants to dine-in customers] on March 16, we had set up meetings with all of our restaurants. At each one, everyone is now contacted at least every 48 hours to check in on them, and we put together a resource guide" with a list of assistance available for restaurant workers, Padro says. "As a leader in a business, you have to prepare your people to get through this."
With new federal assistance and a strong Denver restaurant community, getting through this seems a step closer to reality.