Coronavirus: Georgia Restaurant Association seeking millions of dollars in aid

Source: Atlanta Business Chronicle

The novel coronavirus pandemic is bringing the dining industry to its knees, and the Georgia Restaurant Association is asking government officials to provide support.

Before the COVID-19 outbreak, the state's industry was expected to make $25 billion in revenue this year. Sales across Georgia are already down 50% to 70% since local reaction to the pandemic began, GRA chief executive officer Karen Bremer told Atlanta Business Chronicle.

"I've been talking people off a cliff all week," Bremer said. "Peoples' cash is pretty well dissipated by just a week of up and down business."

Some states and municipalities across the country have ordered the mandatory closure of all bars and restaurants in an effort to stop spread of the virus. This measure is not expected to take effect in Atlanta or Georgia in the immediate future, but the situation is fluid. Some restaurants already have temporarily closed or cut back service.

Should Governor Brian Kemp, Mayor Keisha Lance Bottoms or any other government chief executive mandate closures, the GRA would push to allow restaurants to remain in operation as delivery and take-out businesses. Bremer has asked the National Restaurant Association to contact third-party delivery companies "to see if they will do something with their fees," which are roughly 30% of sales.

The GRA and its national counterpart are hoping governors will formally declare economic injury loan disasters so restaurateurs can apply for U.S. Small Business Association disaster loan assistance. Through this program, $50 billion in total federal funding is available. Business owners can apply for maximum $2 million loans with up to 30-year amortization and an annual interest rate of 3.75%. An application typically has a 21-day processing and evaluation period, but that could be longer based on demand. As of Monday morning, no governor had made the formal declaration to start the application process.

The GRA has been in contact with Kemp and Senator David Perdue. In addition to an economic injury loan disaster declaration, the group is making the following requests of Kemp:

  • Expansion of the Georgia job credit program to employers in the retail and restaurant businesses.
  • Expansion of the investment tax credit to include all hospitality and retail companies.
  • Creation of a state version of the employee retention credit, an income tax credit for certain employers in federal disaster areas who continue to pay their employees during periods in which their businesses are inoperable.

Requested federal assistance includes:

  • Temporary assistance that would allow businesses and employees to defer mortgage payments in the event of further declines in sales.
  • Temporary interest-only payments on any SBA loans.
  • Tax breaks for individual business owners or restaurants that have suffered a 30% or greater decline in business since Jan. 1, 2020.
  • The establishment of restaurants as temporary school meal facilities in order to support families impacted by mandatory school closures.

Restaurants and bars in Georgia operate on profit margins of 4% to 6%. If closures are mandated, Bremer roughly estimates the state's industry would need as much as $83.3 million per month in aid just to cover occupancy and labor costs.

"The industry can't take a hit like this," she said. "It's too fragile. The government needs to step in."