"We need some help." Buffalo bar and restaurant owners say loan programs don't work for them

Posted at 3:00 PM, Apr 20, 2020
and last updated 2020-04-21 07:28:54-04

BUFFALO, N.Y. (WKBW) — The Paycheck Protection Program is designed to help small businesses by offering forgivable loans to help them stay afloat. The program ran out of money last week, but Senate Democrats and Republicans are working to come to an agreement to fund it again.

One category of small business owners, however, say these PPP loans simply aren't designed with them in mind. They say bars and restaurants are left out of the current plan, because of the way it's designed.

"It just didn't seem like the right fit for us," explained Marc Frisicaro, who owns Frizzy's Bar and Restaurant in Buffalo's Allentown neighborhood.

On March 16th, when New York State ordered bars and restaurants move to takeout only, Frisicaro shut his doors. The move allowed his 12 employees to collect unemployment, while he planned for what would come next.

"We're stuck with all this product now and have all these bills to pay," he explained. "We have insurance, sales tax was due, my liquor license expired and I had to renew it, so that was another $3,000."

At first, Frisicaro looked into the Paycheck Protection Program, or the PPP. But says he quickly saw that it wasn't a good option for bar and restaurant owners. Most of their employees rely on tips. Right now, they're able to make more money on unemployment than he would be able to pay them under the program.

"My employees - most of them are bartenders. And their income is mostly on their tips," he said. "With unemployment they're making 500 plus the 600 on top of that. So that's 1100 dollars a week, and it's more than if I took the PPP loan ,they'd just be getting their hourly wage with no tips."

Melissa Fleischut, the President and CEO of the NYS Restaurant Association, understands Frisicaro's concerns. She says the association is pushing for a program that would take into account the unique operation of bars and restaurants.

"We would love to see some kind of specific restaurant industry recovery fund made available to this industry. It's just been a devastating impact across the board on the industry," she said.

The NYS Restaurant Association is encouraging Congress to add funding to the PPP, but also to find a way to help restaurant and bar small business owners.

"I do think Congress will address this. I do think they will add additional funding," she said. "We don't think it's a silver bullet. We need to continue to ask for more help specifically for the restaurant industry."

She also suggested that restaurant and bar owners look into Economic Injury Disaster Loans offered through the U.S. Small Business Association to see if they might be a fit for them. You can find more information on how to apply here.

Meantime, Frisicaro says he'd like to see a small business loan available to places like Frizzy's - something with a low interest rate that business owners could pay back, but that would help them keep the lights on right now. He says he plans to reopen as soon as he can, but knows every bar and restaurant owner won't be as lucky.

"I don't know how many months it's going to go. A lot of these businesses are going to go out of business," he said. "I wish the government would think about a different way to help us in the hospitality business. Because we sure could use the help."