BOSTON — Just two weeks ago, Diane Cohen, owner of the Minuteman Diner in Bedford, feared she might have to close her restaurant permanently if the federal small business loan money she was expecting didn’t arrive soon.
After 25 Investigations took her concerns to Bank of America, her bank for many years and the institution she used to apply to the Federal Payroll Protection Program (PPP), Cohen got the funds she needed much needed.
But the fate of his restaurant is still very uncertain. The terms of the loan, she says, are unrealistic and too risky.
“You have to use 75% of that for payroll, which I don’t know how anyone will be able to do that. That’s a lot. That percentage is high,” Cohen told 25 Investigates’ Ted Daniel, who returned. with her. days after our original story aired. “Between food costs and, you know, all those fixed bills and not knowing when we can open.”
Cohen, like several other small business owners in Massachusetts, says she is grateful for the loan but afraid to use it.
To avoid repaying the loan, 75% of it must be allocated to his next eight weeks of pay. This means that Diane has to bring all of her employees back even though she only does takeout and serves far fewer customers. Commonwealth restaurants are not allowed to reopen for dinner until at least the second week of June.
Diane is not alone. Similar concerns are being heard across the country. And Congress is listening.
David Lewis, CEO of OperationsInc, a human resources consultancy, has been advising business owners on PPP since the program launched in April.
He says federal lawmakers and the US Treasury Department are considering revising the program to provide more flexibility for borrowers.
“It’s going to happen, I guarantee it,” Lewis said. “The question is how fast. The problem is going to be, as it always is in Washington, politics. If we go ahead and give a little on one side of the aisle, the other side of the aisle is looking for something else or some type of compromise.
A proposal would allow loans to cover a period of 24 weeks instead of the current eight weeks, giving employers more time to use the money before local governments allow them to be fully operational.
Another aspect of the proposal calls for the elimination of the 75% payroll rule.
For Cohen, owner of the Minuteman Diner, change can’t come too soon.
Although she has the money in the bank, she would like to see the rules relaxed before touching the funds.
“That’s why I’m hoping the new guidelines they’re going to come up with offer a bit longer extension,” Cohen said.
Changes to the PPP may come in the form of an amendment to the CARES Act, the federal coronavirus stimulus bill, according to Lewis. He says the amendment could pass before the bank holiday weekend.
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