The American Rescue Plan, sanctioned on March 11, includes several measures designed to help people who have suffered major financial setbacks last year, such as restaurant employees who have been unemployed for months or more. Stimulus checks, tax credits for children and expanded unemployment benefits should put more money in their pockets.
But the part of the package that is the biggest deal for the restaurant industry as a whole is Section 5003, which allocates $ 28.6 billion in subsidies for restaurants, bars and other food outlets.
Known as the Restaurant Revitalization Fund, the section is based on the Restaurants Act program first proposed in April 2020 and championed by the Independent Restaurant Coalition, an organization that has Charlestonians among its leaders.
US Representative Earl Blumenauer, D-Oregon, this week told group members in a call from Zoom that the bill “would not look like it would be without the IRC; you helped us create provisions specific to your needs. “
Blumenauer freely admitted that the money set aside for donations is a fraction of the $ 120 billion originally fluctuated. For this reason, sponsors are eager to ensure that restaurant owners who need assistance most are not left out of the process.
Although Blumenauer said he expects restaurants to receive relief in a matter of weeks, not months, the Small Business Administration has not yet announced when it will start accepting requests for funding. Still, he and others who have invested in restoring restaurants are asking owners to familiarize themselves with the program now.
Here’s what you need to know:
How big are these donations?
Potentially very large. Restaurant groups are released for up to $ 10 million, while individual restaurants can receive up to $ 5 million. But to the dismay of some New Yorkers, who feel that their city’s strict regulations should be considered when the money is awarded, these grants are not based on merit.
Instead, they are calculated according to a very simple equation.
To determine the potential amount of the grant, subtract 2019 revenue from 2020 revenue and then subtract how much you received in Payroll Protection Plan loans.
For example, let’s say Lucy Lemonade Stand made $ 14 in 2019. But Lucy sold only a 50-cent cup of lemonade before the pandemic forced her to close by the end of 2020. She didn’t qualify for PPP because she didn’t have any employees, so she could be looking at $ 13.50 in relief.
Wait, the lemonade stands are competing for that money? What about food trucks?
As long as the public turns to you for food services, your business will likely be qualified. According to the law, your business may be a “restaurant, food stall, food truck, food cart, buffet, saloon, inn, tavern, bar, lounge, brewery, beer house” or a producer’s tasting room licensed drinks.
But what if I didn’t open my salon by 2020?
All restaurants are eligible for funding, regardless of the opening date. In fact, even restaurants that have not yet opened are eligible. The only difference is how the stock prices are calculated. For example, if you plan to open a restaurant in November, you can apply for financing equal to the money you spent on eligible expenses before March 11th.
What are the eligible expenses?
One of the problems with PPP is that the money could only be spent on payroll, although many restaurant owners really needed help paying the rent. Restaurant revitalization funds can be used for a wide range of expenses, including, but not limited to: payroll, mortgage, rent, utilities, supplies, food and beverage and paid sick leave.
I didn’t get a PPP loan becauseif I didn’t get a meeting with a bank. Is this going to be a problem with this program?
Probably not. This program will be administered by the Small Business Administration, and while it is possible for the agency to ask private banks to act as intermediaries, those who are familiar with federal operations say that the SBA is unlikely to outsource responsibility for collecting and reviewing orders.
It seems that most of this stinksThe real money ends up going to big companies: I remember last year, when Shake Shack and Ruth’s Chris received millions of dollars from the government. Will it happen again?
Not all beneficiaries will be as small as Lucy Lemonade Stand, but chains of big names are out of the picture this time around. Establishments affiliated to a group with more than 20 locations are not eligible, as are publicly traded companies.
In addition, $ 5 billion of the $ 28.6 billion total is set aside for companies that earned less than $ 500,000 in 2019.
So, does every candidate have guaranteed money?
No. But certain companies will have an initial advantage when requesting it, in part to compensate for the injustices of the PPP process. Companies belonging to women or veterans, as well as those classified by the SBA as socially or economically disadvantaged, will have priority consideration during the first three weeks of the program.
My recipes are not yetare close to pre-COVID levels: if my financial situation doesn’t improve soon, I may have to close my restaurant. If that happens, should I keep the bag?
All unused funds must be returned to the government, but these are grants, not loans. According to Blumenauer’s office, if a restaurant owner tries and fails to stay open, he doesn’t need to return the money already spent.
What can I do to prepare to apply?
First, keep checking the SBA website (sba.gov) for updates on the program’s start date.
Second, make sure you have your paperwork in order. In addition to income statements, the Independent Restaurant Coalition (saverestaurants.org) has published a guide for obtaining a DUNS number and registering with the SAMS federal system. You will need to do both before filling out an application.
Are there other sources of funding for distressed restaurants?
In the short term, the James Beard Foundation on March 15 will open its second round of applications for its Food and Beverage Investment Fund for American Blacks and Indians. The online registration portal for the first come first serve program will be open from noon to 6 pm.
For more details, visit jamesbeard.org.