Restaurant survival hopes improve as subsidies start at $ 28.6 billion
NEW YORK – Thousands of restaurants and bars decimated by COVID-19 outbreak have better chances of survival as government begins handing out $ 28.6 billion in grants – money to help these little ones companies to stay afloat while awaiting customer feedback.
Laurie Thomas is asking for grants for her two San Francisco restaurants that have closed and reopened multiple times as coronavirus cases have risen and fallen; it is still at only 50% of its capacity. Rose’s Cafe and Terzo are operating at a loss, but a grant will help them stay open.
“It allows you to come back in February 2020 and use those funds to help pay off debt, catch up on rent arrears, etc.,” she says.
The Small Business Administration is accepting applications for Restaurant Revitalization Fund grants starting Monday. During the first three weeks, only applications from restaurants that are majority owned by women, veterans and “socially and economically disadvantaged” applicants will be processed and paid, although any restaurant can apply. After that, the grants will be funded in the order they were approved by the SBA.
The grants, up to a maximum of $ 10 million, are intended to replace lost revenue in catering businesses with up to 20 locations. Businesses with more than one restaurant can get up to $ 5 million per location, but each applicant is limited to a total of $ 10 million in funds.
The grant money is in addition to Paycheck Protection Program loans that have helped Thomas and other restaurateurs pay their employees.
“They’ve been a huge savior for us, but it’s not enough to make sure we’re going to survive,” Thomas says of his two PPP loans.
The restaurant industry has been among the hardest hit by the pandemic. The National Restaurant Association estimates that the industry has lost $ 270 billion since the start of the pandemic. Over 110,000 restaurants have been closed long term or permanently and 2.5 million jobs have been lost.
Restaurants will remain vulnerable until people are comfortable with contracting the virus and as long as business and leisure travel remains depressed, said Sean Kennedy, executive vice president of the restaurant association.
The grant program is “an incredible first step that will help tens of thousands of restaurants,” says Kennedy. If the $ 28.6 billion is quickly depleted, the industry group will ask Congress to approve more funds for the grants, he said.
A grant would give Sara Bradley money to cover running costs and allow her to paint and furnish her restaurant – a maintenance that has been scrapped as revenues have halved in the past year.
“It was more important to keep our employees paid than to put a new coat of paint on the walls,” says Bradley, owner of Freight House in Paducah, Ky.
The money would help support the restaurant while Bradley waits for state officials to lift capacity restrictions; currently restaurants can only have 60% of their usual number of customers and employees. This would help cover costs which have risen sharply in the midst of the pandemic – supplies as mundane as food preparation gloves have doubled or even tripled in price. Freight House is in dire need of a new computer, but Bradley held back on buying one and instead spent the money on staff increases.
The grants are of interest to restaurateurs who did not receive PPP money because they feared having to repay loans, said David Lopez, president of the Greater Kansas City Restaurant Association.
“It took a lot of faith to step in and do this when you already have your back pressed against the wall,” says Lopez, who is also the general manager of Mexican restaurant Manny.
The family business has weathered the pandemic relatively well, with revenues currently down 15% to 20%, compared to the more than 50% drop many restaurants have suffered. Lopez attributes this in part to the loyalty the 41-year-old restaurant has enjoyed with its customers.
“The new restaurants, which may have started before the pandemic, are the places that are really affected. The margins are pretty thin like that, even without the pandemic, ”he says.
A grant would help Sac’s Place owners pay off rent to their landlord and unpaid bills to vendors. And, says co-owner Domenico Sacramone, restore the menus so that they offer the variety of dishes they had before the pandemic.
“We were working on the bare minimum. We will be restocking the place entirely, ”says Sacramone, whose restaurant is located in New York’s Astoria neighborhood.
The restaurant, which has been closed twice amid the pandemic, has survived on payroll PPP loans, rent concessions and its already strong take-out and delivery business. Without the subsidy, Sacramone doesn’t know how it would pay the restaurant’s creditors.
“We’re not looking for much, just to get ourselves out of the bump and help us be where we were before the pandemic started,” he says.