San Francisco’s 21st Amendment Brewery released an immediate “call to action” for local and state officials to advocate for commercial lenders to institute a 60-day moratorium on principal and interest payments for small businesses during the COVID-19 global pandemic. Such an effort would allow small businesses to cover payroll expenses to retain staff employees. While four big banks — Citigroup, JPMorgan, U.S. Bank and Wells Fargo — as well as hundreds of state-chartered banks and credit unions delay the collection of mortgage payments for those affected by the crisis, commercial lenders must follow suit.
Nico Freccia, Co-Founder/CEO of 21st Amendment Brewery, said: “One month of bank principal and interest payments would cover 100 percent of our entire company’s current monthly payroll. And right now, with reduced and limited revenue, we need that money going into the pockets of our workers and our communities. Instead, we are faced with that revenue going into the pockets of the banks, in our case an international company owned by a foreign entity. All of us need to publicly call on commercial lenders now to voluntarily offer a moratorium for a minimum of 60 days on principal and interest payments during this crisis.”
21st Amendment Brewery operates a brewery/restaurant in San Francisco and a production facility and taproom in San Leandro, Calif. 21st Amendment employs over 110 people in the Bay area. After the shelter in place order was mandated, the brewery was forced on March 16 to lay off or furlough all of their hospitality workers, approximately 60 in total. While the production facility in San Leandro is allowed to continue operations under the federal definition of essential manufacturing, 21st Amendment drastically scaled back their production payroll.
With a 60-day moratorium on principal and interest payments, 21st Amendment and many other local small businesses would be allowed to provide income to workers within their communities.
Freccia stated, “We have repeatedly asked our bank for deferral of principal and interest payments, which are due in just a few days. They have yet to offer any relief, specifically stating that while Congress wants them to be accommodating, there has not been any official guidance released for them.”
Under a deferral program, banks will still receive their principal and continue to accrue interest. While there is no hardship to the banks, a 60-day moratorium on payments could substantially help Bay Area small businesses weather this storm and keep staff employed.