Fund for restaurants 'brilliant' way to help
American Rescue Plan has $28.6B for struggling industry.
A year after the first restaurants were ordered to close because of the COVID-19 pandemic, a new fund is expected to throw a lifeline to restaurants still staggering from losses sustained in 2020.
The American Rescue Plan Act, which was signed into law late last week by President Joe Biden, means the creation of the $28.6 billion Restaurant Revitalization Fund and a new federal program for restaurant owners with 20 or fewer locations.
Operators can apply for tax-free grants of up to $5 million per location, or up to $10 million for multi-location operations, according to the National Restaurant Association. The grant amount is determined by subtracting 2020 sales from 2019
revenues.
Tacoyia Redmon, co-owner of downtown Dayton’s Olive Mediterranean Grill, said the fund is “a brilliant idea.”
“It’s a good way to give back to the community, and try to give people that extra push that they need so we can move forward,” Redmon said. “I know a lot of small businesses struggle, in general, and with the simple fact that COVID came around, it made a huge impact on a lot of business owners. Some of them even lost their businesses.”
Since restaurants shut down in March 2020, foodservice sales have fallen $255 billion and 110,000 restaurants have closed, according to the National Restaurant Association.
Similar to the Paycheck Protection Program, Restaurant Revitalization Fund grants will be distributed by the Small Business Administration and can be spent on a wider range of expenses than previous relief programs. That includes mortgages or rent, utilities, supplies, food and beverage inventory, payroll and operational expenses.
Five billion dollars of the fund will be set aside for restaurants with gross receipts under $500,000 and, for the first three weeks of the application period, the Small Business Administration will prioritize awarding grants for women-, veteran-, or socially and economically disadvantaged-owned businesses, the National Restaurant Association said.
Olive Mediterranean Grill, which moved from Northridge to downtown Dayton in 2018, saw revenues dip by as much as 30% in 2020, Redmon said.
“Luckily ... we are blessed and we’re still kicking,” she said. “We’re losing a little bit of money because we used to do a lot of catering orders, at least a couple a week, and now we barely get a couple a month only because people are not (together).”
Redmon said the business getting approved for the grant would especially useful in helping cover expenses.
“Being a small business owner being impacted by a pandemic has been a struggle within itself, and if I could get any money back at all to even help a little bit, that honestly would be truly the biggest and best blessing that I would see thus far with this five years that we’ve been in business,” she said.
Bill Castro, co-owner of third-generation, family-owned restaurant El Meson in West Carrollton, said he was “thrilled” to hear about the grant and hopes his 43-year-old business can qualify for one after details of the application process are announced.
“I’d like to think that this is exactly what’s going to be needed to be that next step to really solidify this so we can get back on track,” Castro said. “I mean, our sales, we lost half a million dollars just in one month in December with the sales we would have had with holiday parties, with events, with things that would have normally been what we would have done in 2019, we lost out on in 2020, and that was just one month.”
Castro said the grants could be the catalyst to help restaurants “ramp back up again” and solidify efforts to revive the industry and save businesses and jobs nationwide.
At the start of the pandemic, the National Restaurant Association sent a plan to Congress urging the creation of an industry-specific relief program. It worked with Congress and both the Trump and Biden administrations toward ensuring restaurants had ‘as many tools and supports as possible to survive,” the association said.
That included securing special treatment in the creation, and subsequent improvements to the PPP, which has provided more than $70 billion in support for restaurants to date; the expansion of the Employee Retention Tax Credit; the extension of the Work Opportunity Tax Credit; and inclusion in the Economic Injury Disaster Loans program.
“We are still a long way from full recovery and it’s likely more grant money will be needed to get us there, but today the industry has hope for the future,” Tom Bené, president & CEO of the National Restaurant Association, said in a statement.
The restaurant industry has lost more than $250 billion in revenue since the beginning of the pandemic, according to the Ohio Restaurant Association. The Restaurant Revitalization Fund provides “another lifeline for operators and employees,” according to John Barker, ORA’s president and CEO.