$28.6B in restaurant grants could jump-start recovery
Unknowns linger for battered food industry
Hawkers Asian Street Food CEO Kaleb Harrell believes the $28.6 billion in grants for restaurants in the latest stimulus package could help speed up his industry’s recovery from the coronavirus pandemic, but he’s also waiting on the fine print.
“We came out of this scarred and in a much worse position than when we came into it,” Harrell said. “I think in order to see a recovery in the restaurant industry this is absolutely necessary. It forces a recovery now.”
The worst week of the pandemic saw Orlando-based Hawkers lose a quarter-million dollars in cash in the week, Harrell said. At a different point last summer, the weekly cash loss rate was $100,000.
Still, one question Harrell has involves whether his company is eligible for the federal funding.
The grant could provide businesses an amount equal to the revenue lost because of the pandemic. At seven existing Hawkers restaurants, revenue was down an estimated $6.1 million last year. However, thanks to the opening of four new restaurants, overall sales across the Orlando-based company were almost the same from 2019 to 2020 even as expenses grew from the new locations. “Because we grew our unit count in the year of 2020, our revenue doesn’t look like it was hit as badly, but we actually lost more money than if we had just not opened the restaurants in 2020,” Harrell said.
Restaurants are waiting on the Small Business Administration to come up with rules and forms for the Restaurant Revitalization Fund, said Geoff Luebkemann, Florida Restaurant & Lodging Association senior vice president. Hawkers’ situation is also not an uncommon dynamic, he added.
“There’s some unknowns right Luebkemann said
Publicly traded companies aren’t eligible for the program, which is for restaurants now,” with 20 or fewer locations, according to the National Restaurant Association. The revenue loss between 2020 and 2019 also is reduced by the amount companies received through the Paycheck Protection Program.
Hawkers did receive about $3 million in PPP funds last spring, which it used to keep 500 employees. It was recently working through potentially getting a second round of PPP funding, according to Harrell.
It now has 791 employees, said director of communications Esther McIlvain.
Grants from the Restaurant Revitalization Fund over an initial 21 days are also expected to be prioritized for small businesses controlled by women, veterans or “socially and economically disadvantaged small business concerns,” the National Restaurant Association said.
The funds can be spent on payroll, mortgage principal and interest, rent, utilities, maintenance, construction for outdoor seating, protective equipment, cleaning supplies, paid sick leave and normal food and beverage inventory, according to the restaurant association.
“It’s critical,” Luebkemann said. “It’s a capital infusion with great flexibility to put it where you need it.”
Businesses that made it through the pandemic could use the money on expenses like delayed maintenance.
“There’s no doubt that decisions were made to forgo immediate needs for immediate survival,” Luebkemann said.