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Restaurants may have to wait for $29B in new federal aid

Administrators of the Restaurant Revitalization Fund are shooting for a one-month ramp up, but can't say when they'll begin distributing grants.
Photograph: Shutterstock

Restaurants may have to wait at least another month before getting access to the $28.5 billion in relief funds that were set aside for the industry by the American Rescue Plan, the landmark piece of legislation enacted on March 11.

Officials of the Biden administration told the Senate Committee on Small Business and Entrepreneurship on Wednesday that they cannot commit to an exact date when the U.S. Small Business Administration (SBA) will begin distributing the funds in grants of up to $10 million.

“Are we talking a week? Are we talking a month?” Sen. Maria Cantwell, D-Wash., pressed in her questioning of the officials.

“The timeframe we’re going for is 30 days,” Patrick Kelley, associate administrator of the SBA’s Office of Capital Access, said in his testimony before the committee. “We’re focused like a laser on getting it up as fast as possible.”

Kelley noted that he just moved into his position with the SBA three weeks ago. Other participants in the committee hearing noted that President Biden’s appointee to head the agency, Isabella Guzman, was sworn into her post on March 16.

Kelley explained that the distribution of the billions earmarked for restaurants—the Restaurant Revitalization Fund—is a unique undertaking for the SBA. The agency usually provides assistance to small businesses by guaranteeing loans granted by third-party lenders. The Fund’s dollars will be channeled to restaurants as outright grants.

What’s more, Kelley said, the agency anticipates receiving requests from hundreds of thousands of small restaurants seeking relatively small amounts. With that sort of volume, he said, the SBA is looking at ways of automating the application and grant-allocation processes. The agency is currently meeting with potential suppliers of the necessary technology, which may include artificial-intelligence capabilities that lower human involvement in the process.

He also mentioned that conversations are being held with POS suppliers to see if data needed by the SBA to determine the size of a grant could be uploaded directly from applicants’ terminals.

Kelley’s comments suggested that at least some restaurants may be able to apply or qualify for funding without dealing with a human being.

“We will need a technology platform to deal with what we expect will be hundreds of thousands of grant requests,” Kelley said.

Despite the delaying factors raised by Kelley and other Biden administration officials who testified yesterday, members of the Senate committee were adamant about distributing the aid as rapidly as possible.

“Getting clear information out as quickly as possible is essential,” said Sen. Jeanne Shaheen, D-N.H. Based on what her restaurant constituents are saying, “if they don’t get the guidance soon for how they can apply, they may not be able to survive.”

Several senators aired hopes the ramp-up would be shorter than it was for the Shuttered Venues Operator Grants, an aid program that was part of a COVID relief package signed into law by President Trump in December. The SBA just announced that it will start fielding requests for grants under that program on April 8, or more than three months after enactment.

Under the American Rescue Plan, restaurants can apply for up to $5 million in financial relief per restaurant. The amount is determined by subtracting an applicant’s 2020 revenues from its 2019 intake.


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