The Small Business Administration will begin accepting applications May 3 for a $29 billion grant program aimed at boosting the restaurant industry, according to the agency.
The program, officially known as the Restaurant Revitalization Fund, is the first federal pandemic aid exclusively for restaurants, bars and other food-service businesses. It was authorized by Congress as part of its $1.9 trillion coronavirus-aid package that became law last month, and will be a key source of aid to an industry that has been hard hit by the pandemic.
Restaurants and bars reported sales of $659 billion last year, down by nearly a quarter from 2019, according to the National Restaurant Association. More than 110,000 bars and restaurants closed at least temporarily, according to the trade group’s estimates.
Restaurant owners lobbied Congress for months for dedicated funding for the industry, arguing that restrictions imposed on in-person dining to curb the virus’s spread harmed their ability to do business.
Grant recipients are eligible to receive funding equivalent to their pandemic-related revenue loss, up to $10 million per business, according to the SBA website. A single physical location can receive no more than $5 million.
Interested businesses can begin registering for the grant application portal on Friday, April 30, and applications will open at noon EST on the following Monday, according to the SBA. The agency earlier this month said it was testing the portal to address any technical issues ahead of the initiative’s public launch.
That announcement followed the rocky rollout of a $16 billion grant program for the live-events industry. The SBA was forced to close applications for the live-venue program shortly after launching on April 8 due to technical glitches. Following efforts to address the issues and additional testing of the application portal, the agency reopened that program on Monday.
The restaurant grants will add to several pandemic-aid programs the SBA is overseeing. The largest of those programs is the popular Paycheck Protection Program, which has approved 5.1 million forgivable loans worth roughly $248.5 billion to small businesses in 2021, according to SBA data as of April 25.
Beyond restaurants and bars, the SBA is allowing food trucks, caterers, cafes and some distilleries, breweries and inns to apply for the grants. Business owners can have up to 20 locations, and franchisees for major chains may apply. Public companies aren’t eligible, nor are live-music venues that have applied for funding through the SBA’s program targeting those establishments.
Justin Anthony, co-owner of two bars in Denver, said he had been repeatedly hitting refresh on the SBA’s grants portal to make sure he didn’t miss out on its opening.
“We have compiled every piece of potential documentation that they could require so we have it at the ready,” said Mr. Anthony, who tapped his personal savings to stay afloat during the pandemic. His business partner refinanced her home as sales at their bars fell by more than 60% last year.
Mr. Anthony said he hopes to tap the federal funds to keep going until more customers are fully vaccinated and demand improves.
The grant funds may be used for expenses such as payroll costs, business supplies and construction of outdoor seating.
Restaurant sales have improved from steep declines during the winter, when many states imposed fresh restrictions to try to curb the virus’s spread. Still, food businesses have continued to suffer. Nearly 14,200 restaurants closed for good this year through March, according to market-research firm Datassential.
Patrick Kelley, associate administrator of the SBA’s Office of Capital Access, said during a recent training with restaurant owners that funding for the grants will likely run out in its first phase without all eligible applicants receiving money. Mr. Kelley said the agency was working to ensure business owners got their grants as quickly as possible without it being distributed irresponsibly.
“The guiding principle is that the most amount of relief goes to as many businesses in as short amount of time,” Mr. Kelley said.
If funding is exhausted, Congress would need to allocate additional money for the program to continue.
The SBA has said it would process and fund certain priority groups through the first 21 days of the grant program. Those groups include businesses that are majority owned by women, veterans or people who are socially and economically disadvantaged. Following the priority period, the agency will fund other applications on a first-come, first-served basis.
The SBA earlier announced a new type of partnership to allow businesses to use their point-of-sale service providers to fill applications for the grant program. The collaborating providers are Clover, NCR Corp., Square and Toast.
in a statement said the partnerships are an effort “to meet small businesses where they are, instead of waiting for them to come to us.”
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Source: WSJ – US News