Help Is on the Way for Restaurants. Here’s What You Need to Know

In President Biden’s just-passed $1.9 trillion COVID-19 relief bill, $28.6 billion in grants are headed to bail out our favorite bars and restaurants.

Restaurant owners looks at paperwork
Photo: Shutterstock / Prostock-studio

With over two million hospitality workers unemployed due to the COVID-19 pandemic, it's impossible to miss the palpable joy cautiously rising from every corner of the industry over the RESTAURANTS Act, which, as part of the $1.9 trillion American Rescue Plan, will provide $28.6 billion in grants to businesses hit hardest by the crisis.

On Wednesday afternoon, the bill passed in the House of Representatives, after passing in the Senate last weekend. Once signed by President Biden on Friday, it will be the first-ever grant relief program specifically intended for restaurants and bars. "Today, we're filled with joy that this proposal finally hits the President's desk," said Representative Earl Blumenauer of Oregon, one of the program's core champions in the House. Senate Majority Leader Chuck Schumer said, "The first amendment I ever put on the floor as Majority Leader was the RESTAURANTS Act, and I was proud to say that it was cosponsored by a Democrat and a Republican."

The bill, a result of nearly a year's worth of collaboration between the Independent Restaurants Coalition (IRC) and members of Congress from both sides of the aisle, stipulates eligibility as "food service or drinking establishments, including caterers, brewpubs, taprooms, and tasting rooms, that are not part of an affiliated group with more than 20 locations." Funding must not exceed $5 million per individual restaurant, and $10 million per restaurant group, and grant allocations will be handled by the Small Business Administration (SBA). Rep. Blumenauer indicated that, in the future, the fund must be replenished, should the need arise.

The exact pay-out amounts will primarily be determined by revenue, and businesses that received PPP loans are still eligible. For restaurants established prior to 2019, that eligibility calculation involves their 2019 revenue minus their 2020 revenue, minus any PPP loans. For restaurants that opened in 2019, this means the average of their 2019 monthly revenues, multiplied by 12, minus their 2020 revenues. Any restaurants that opened in 2020 are eligible to receive funding equal to the eligible expenses they've incurred, as determined by the SBA.

Funds can be used toward payroll and benefits, mortgage payments, rent, utilities, maintenance, supplies, food, operational expenses, and any other expenses deemed essential by the SBA. Restaurants can prepare to apply for funding through this website.

"I'd love to see the President sign the bill on the 13th [of March], because it's a year from when we first closed our restaurants," said chef Tom Colicchio, one of the co-founders of the IRC. "Senator Schumer, too often it's said that politicians don't keep their promises, and you made a promise that you weren't going to forget about us, and you didn't."

The bill notably prioritizes funding for independent hospitality businesses owned by women, BIPOC, and veterans; owners in these groups will be able to apply for funding first. According to Rep. Blumenauer, the bill draws its strength in part from the challenges and pitfalls of PPP loans. The communication around the program was often bungled, and the loans were simply inaccessible to businesses that needed it the most.

Erika Polmar, Executive Director of the IRC, said that this time around, city-specific coalitions (like ROAR, Tennessee Action for Hospitality, and the Los Angeles Independent Hospitality Coalition) will be brought into the fold to help spread the word in their communities about how restaurants can access funds as seamlessly and quickly as possible.

It's a huge win that will help keep the lights on in restaurants across the country. The bill also sets up the IRC for what Colicchio, Polmar, and other founding members very clearly intend to be a permanent presence advocating for the hospitality industry in Washington. "We're not going away," Colicchio said, smiling. "We've been singularly focused on recovery funding to rebuild the supply chain dependent on restaurants, but we are fully committed to continuing to serve this community."

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