Self-employed and contract workers in the hospitality industry can breathe a sigh of relief as it seems they will eligible for loan forgiveness under the government’s Paycheck Protection Program (PPP).
The financial aid package, unveiled in March and tweaked several times since then, will provide much-needed succour for the self-employed it has been clarified. While previous PPP rules made it difficult for self-employed workers to get above the 75% payroll threshold, changes will now make it easier.
The SBA filed its 19th Interim Final Rule (IFR), ensuring full forgiveness for self-employed, freelancers and independent contractors who took the maximum loan amount based on 2.5 times their 2019 monthly income.
The flexibility act includes a raft of welcome changes, including extending the maturity date for loans granted after June 5th from two to five years. The period for the loan forgiveness was extended from eight weeks to 24 weeks and the required payroll spend fell from 75% to 60%.
Welcome news yesterday from the IRF included guidelines on how to calculate owner compensation, employee compensation and non-payroll costs.
Can be compensated in two ways:
Eight weeks’ worth (8/52) of 2019 net profit (up to $15,385) for an eight-week covered period, or
2.5 months’ worth (2.5/12) of 2019 net profit (up to $20,833) for a 24-week covered period.
Payroll costs are capped at $100,000 of annualised pay. Now instead of $100,000/52 * 8 (a max of $15,385 per individual), you get up to $100,000/52 *24, making the new maximum forgiveness cap $46,154 per individual for 24 weeks.
Loan forgiveness amounts for non-payroll expenses have been extended to 24 weeks including mortgage, rent and utility.
The photo of Camilla Moccia, bent over in despair over the closure of her trattoria, has gone viral in Italy as a symbol of the suffering faced by those across the hospitality industry. Here she speaks to Fine Dining Lovers about the photo and her plight.
With a $1.9 trillion stimulus package winning final approval in Congress, what are the implications for the restaurant industry going forward? Will the Biden-Harris administration help the sector to rebound in the wake of the pandemic, or will restaurants continue to struggle? Andrew Friedman investigates.
It's been the worst of times for the restaurant industry all over Europe and beyond. But in Scandinavia, the cities of Stockholm, Oslo and Copenhagen have faced their own challenges. Discover how they are dealing with the Pandemic.