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Restaurants that have received Paycheck Protection Program (PPP) funding may soon find out if their loans have been canceled. The U.S. Small Business Administration (SBA) on Friday began processing forgiveness requests, with some lenders already receiving funds to cover loans to restaurants and other small businesses under the $ 670 billion program, according to a spokesperson.

Many restaurants that have received funding are waiting to see if their loans will be essentially treated as outright grants, without the need to repay the aid. Otherwise, borrowers will be charged 1% interest and have to repay the principle, which could reach $ 10 million. Loans granted before June 5 have a term of two years. Loans granted subsequently, during the second wave of PPP financing, have a window of 5 years. Repayment is deferred for six months.

Some restaurant filers say they reached out to their lenders to get an idea of ​​the forgiveness timeframe, only to learn that financial institutions had not yet been notified of the timeline by the SBA or its parent agency,

The P3, the primary form of assistance given to small businesses by the federal government, was designed as a way to help employers of small businesses like restaurants keep their staff on the payroll as the pandemic halted the economy. For their loans to be canceled, recipients had to initially spend up to 75% of the funds on employee compensation and use the money within eight weeks. Under intense lobbying from the National Restaurant Association and other industry groups, Congress extended the uptime to 24 weeks and lowered the payroll requirement to 60%, which means 40 % of funds could be used for rent or operating expenses.

The program has proven to be an essential lifeline for restaurants. Nearly 50,000 restaurants have received loans of at least $ 150,000, according to an analysis by Catering company. The identity of transactions receiving less than this amount has not been disclosed.

The money was intended for small businesses. But eight of the restaurant recipients rank in the top 100 chains based on system-wide sales. About a third of the brands in the Top 500 were on the SBA’s records as recipients.

In total, restaurants and hotels received 8% of the funds SBA loaned under the PPP, or about $ 41 billion in total. Four other industries received a higher aggregate amount.

The average amount provided for all PPP loans was $ 105,000, according to the SBA. In total, $ 517 billion was granted through 4.9 million loans, leaving about $ 135 billion in funding unused.

Another PPP?

The start of the pardon approval process comes as the fate of the PPP remains uncertain. A bill passed by the House of Representatives would allocate additional funds to restart the program, which ceased to accept nominations on August 8. But the measure hit a brick wall in the Senate.

President Trump on Tuesday asked White House subordinates to cease negotiations on a compromise measure until after the elections. After winning a second term, the president said, he would immediately put in place an aid program that helps small businesses.

Last night, Trump tempered his opposition to some form of federal aid. He tweeted, “The House and Senate are expected to IMMEDIATELY approve $ 25 billion for airline payroll support and $ 135 billion for the Small Business Paycheck Protection Program. Both will be paid in full with unused funds. of the Cares Law. Have that money. I’ll give it a sign now! ”

Some proponents of a stimulus have favored a payback of the PPP through a separate and less controversial bill that Congress may be prepared to pass before suspending the election.

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