How far will the $28.6 billion relief fund for restaurants go?
How far will the $28.6 billion relief fund for restaurants go?
The new federal economic relief package provides $28.6 billion for restaurants, food trucks and bars. Like the Paycheck Protection Program, the Restaurant Revitalization Fund is a lifeline for businesses devastated by the pandemic. But there are at least some key differences.
PPP loans came with rules. For the money to be forgiven, a good portion had to go to payroll. Beth Gruitch, who owns four bistros in Denver, couldn’t safely bring enough people into work. So to meet requirements, “we had, you know, essentially paid our employees to stay home.”
She’d like to have spent some of the loan on her outdoor dining setup. That’s her plan if she gets a grant — it’s not a loan — from the Restaurant Revitalization Fund.
How much money businesses qualify for is an easy equation: 2019 gross receipts, minus 2020 receipts, minus any PPP.
Certain types of businesses will be prioritized. “The first 21 days are going to be set aside specifically for women- or veteran-owned businesses or people in socially or economically disadvantaged businesses,” said Sean Kennedy, executive vice president of public affairs at the National Restaurant Association. And $5 billion will go to restaurants that made $500,000 or less in 2019.
Kennedy hopes this means funding will be divided more equitably. But, “it’s just a question of how long the funds will last.”
That’s partly because restaurants are in a big hole. Melissa Fleischut, president and CEO of the New York State Restaurant Association, said many of her members are overdue on their rent.
“As far as clearing up that mountain of debt from the last year and trying to help them feel like they can start over, this is really what they need,” she said.
Since the start of the pandemic, more than 110,000 restaurants have closed long term or permanently.
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