that of President Biden $ 1.9 trillion stimulus bill, which passed the Senate on Saturday and aims to inject significant federal resources into the economy, is seen as a substantial victory for those in the restaurant industry who have advocated for specific financial aid to restaurants since the start of the pandemic.
The restaurant industry is expected to receive $ 28.6 billion in debt-free grants, with some companies up to $ 5 million each if the stimulus bill goes through. The bill, titled American Rescue Plan, is expected to be introduced in the House on Tuesday where it is expected to narrowly pass with a Democratic majority as it did in the Senate before hitting Biden’s office for enactment.
Many hospitality professionals see the Restaurant and Bar Grants Program as the long-awaited lifeline they are looking for.
“We’re obviously thrilled,” said Emily Williams Knight, CEO of the Texas Restaurant Association. “We wanted a dedicated fund and we knew in April (…) that we were going to need targeted help.”
Contrary to Federal Paycheque Protection Program which distributed loans to businesses in all industries with 500 or fewer employees in a given location, the restaurant subsidy would provide a targeted subsidy only to restaurants and bars that experienced a 20% loss in revenue from 2019 to 2020. Unlike PPP loans. , grant money can be used for a wide range of expenses, including payroll, mortgage, rent, operating costs, sanitation supplies, maintenance, inventory, and debts owed. providers.
“You have to have 20 units [locations] or less to qualify, so it’s really going to target the typical single entities that haven’t had access to the capital or the small independent restaurants that we’re most concerned about, ”Knight said.
Minority, female and veteran owned restaurants and bars will be given top priority during the first 21 days of the program, which will be run by the Small Business Administration, Knight added. The SBA will be responsible for the distribution of all funds, unlike the banks, which distributed the PPP funds.
The PPP loan program, which aimed to save small businesses, faces intense scrutiny in the restaurant industry after major restaurant chains like Shake Shack, TGI Friday’s and Ruth’s Chris received millions of dollars through the program. Supporters of the restaurant subsidy hope this new program will instead channel aid to small mom and pop restaurants.
“You think of the big restaurant chains, and a lot of them won’t be able to participate, but your little independent restaurant, this local Italian restaurant that needs a $ 60,000 grant to help them get through these next few months, these are the people who are going to benefit, and these are the ones we wanted direct relief for, ”Knight said.
One of those Italian restaurants in Richardson, Aboca’s, is exactly the kind of business that should benefit from the grant program. Aboca owner Arthur Pira said his company saw a 45% drop in revenue from 2019 to 2020, and that he is currently keeping the doors open due to an SBA loan.
“I spent all my savings and used all the money I had saved for 30 years. If it hadn’t been for this loan, I would be closed right now, ”Pira said. “It will be a huge help to us if this grant materializes. “
The downside of the program, according to Knight, is that if the stimulus bill passes, the grant money is unlikely to reach restaurant and bar owners until the end of May due to the time it takes for the government to establish. a new fund distribution mechanism.
This timeline is worrying for Pira, who says it could be too late for some companies or unnecessary if business picks up as vaccines become widespread and restaurants increase capacity. That kind of relief should have happened months ago, he said.
Tiffany Derry, owner and chef behind Roots Chicken Shak at Plano, said the grant money will come in handy no matter when it ends up in the coffers of struggling businesses.
“Any relief we could get, whether today or tomorrow as we cling to life, would be worth it,” said Derry.
But she has her own reservations. After nearly a year of waiting for relief, she said she was careful not to be overly excited or overly optimistic about the promise of a helping hand. She applied for an SBA loan months ago to help keep her business running, but was turned down, so she’s skeptical of what the fine print might contain regarding companies that can get a share of the funds from the federal grant.
Her skepticism, however, does not overshadow the hope that she might be one of the lucky ones to benefit from the program. With income falling and expenses rising, she said she would take all the help she could.
“I think in terms of intention it sounds good and like something that could help us,” she said. “Right now it feels like we’re just paddling in the water and trying to figure it out day to day, and sometimes a little help makes you feel like you have a little leeway. maneuver. “