COVID-19 Assistance for Hospitality Businesses-Legal Guide SUPPLEMENT
Supplement 4/1/20
Recently, the government has made COVID-19 assistance for hospitality businesses a priority. We have updated our earlier guide with the most recent legal information available. If you own a bar or restaurant and have any questions, I will be glad to consult with you free of charge.
Payroll Protection Program Grants
Yesterday the Treasury Department released comprehensive guidelines on this loan program. It is for small businesses who retain (or quickly rehire) their employees. The loans are payment deferred for 6 months, federally guaranteed, and provided that 75% of the funds are used for payroll, rent, or mortgage the loan is ultimately forgiven. Applications open April 3, 2020. This program is administered through private lenders – so get in touch with your bank. Fact sheet here.
Today the SBA published the application form.
Small Business Debt Relief Program
If you already have a non-disaster SBA loan, this program will provide relief in the form of payments on your existing loan including principal, interest and fees for up to six (6) months. Additional info here.
Economic Injury Grants
By now most small businesses are aware of the Economic Injury Disaster Loan Program (EIDL) and have or will apply. This grant program provides emergency funds up to $10,000 to small businesses who are eligible for EIDL loans. If you have already applied for an EIDL, you must apply for the $10,000 advance, it will not impact your pending application. Additional info here.
Refundable Payroll Tax Credit
This is a refundable payroll tax credit for 50% of wages paid by employers during the COVID-19 crisis. There are eligibility requirements for both employers and employees and the program is not available if you are receiving Paycheck Protection Grants. Information here.
D.C. Grants
The application deadline for the $25 million in grants for small businesses has been extended to April 1, 2020. Get your application in.
Eviction/Rent Protections
The D.C. Superior Court is closed and no evictions, residential or commercial, can be carried out. However, for commercial tenants, this does not mean you are out of the woods. It is possible that if you don’t pay your rent, you could be in default of your lease.(depending on the language of the Lease). That means, when the Court re-opens, you could be unprotected from eviction. The present state of the law is that there is NO rent protection, there is only temporary eviction protection. The terms of commercial leases vary widely and you should consult your lawyer to understand your rights.
This post is intended as a guide to the COVID-19 assistance for hospitality businesses. I will update it periodically. However, in making decisions about the best course of action for your business, you should consult with your lawyer. If you do not have a lawyer, I am offering free assistance to nightlife establishments. Simply make an appointment for a conference call.