The Payroll Protection Program Is Complicated For Restaurants. One Chef Explains Why.

When the Payroll Protection Program (PPP) was launched in early April, it was meant to help small businesses get back on their feet by offering a forgivable loan to pay for two month’s worth of payroll, rent, and utilities. However, given the rules for how the money could be used, chefs and restaurant owners found the program to be deeply flawed. Still, in desperate need of funding, many applied for the loan, hoping that the rules would change. Mason Hereford, the chef and owner of Turkey and the Wolf (a Hot 10 alum) and Molly’s Rise and Shine (a Top 50 nominee) in New Orleans, was one of more than 1.6 million small businesses whose applications were approved. Here, Mason breaks down why PPP doesn’t work for restaurants, what changes would be necessary for the loan to work, and what that means for restaurants like his in the future. —Elyse Inamine

Man, I miss my fucking job. The people I work with are my best friends. I know I’m lucky. And I know it sounds like bullshit, but having fun with each other and translating that into a good time for our guests is the most important part of the job. This is easy for me to say because I work with a bunch of people wiser and more talented than I am, but knowing how to support them ain’t as obvious as it used to be. My restaurants are closed, just like thousands of others. So what do I do? I’m writing an op-ed. Go figure.

I’m on my computer constantly these days. I sit in on Zoom meetings with the Independent Restaurant Coalition (IRC). I do daily calls with the Hospitality United Alliances (HUA). Sometimes, these calls go on for hours—they can feel more like a workaholics support group. We’re consumed with figuring out how to make positive changes for the little guy restaurants. We’re wondering how to keep everyone in a job. We’re trying to survive to pay our bills. We’re trying to understand what the Payroll Protection Program (PPP) is.

Before PPP came out, I was obsessed with figuring out how to get in line. I emailed a dude at the bank every couple of days, just reminding him, Hey, I’m here. I heard it was first come, first serve, which was terrifying. I realized, Wait, this might run out. Then it did. Somehow, I was approved for a PPP loan a few weeks ago. The bank told me I had 10 days to sign.

I didn’t know what to do with the thing. I’d spent so much time learning about PPP and I felt strongly that it wasn’t right for me. I thought I’d have to cut everyone’s pay to make it work, so my intention was not to take it. I wrote an email to my staff: PPP is out, you’re fucking in. This thing is confusing and full of red tape. I ain’t touching it.

I’m privileged to have a badass named Margaret as my accountant. She studied every sentence of that bill and attended an unreasonable number of webinars to learn how to interpret its limited language. If you don’t follow the rules to the letter, you have to pay back whatever the bank doesn’t forgive in two years. Keep in mind, the loans I used to open my restaurants have 10-year terms. Restaurants can handle those. But taking on a loan that you have to pay back in two years with a whack-ass, COVID-19-depressed business model is a set-up for failure. I’m worried about the tons of mom-and-pop restaurants out there who have a handful of employees and no badass accountant. This stuff is fucking dense. If you slip up, you can owe a lot of money when you don’t really have it.

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