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Financing

Week One of the $29B Restaurant Revitalization Fund: $2B awarded

Initial grants averaged $125,000, draining the Fund by about 7%. Industry officials have voiced fears that the pool will run dry in a matter of weeks.
Photograph: Shutterstock

More than $2 billion was awarded from the $28.6 billion Restaurant Revitalization Fund to about 16,000 establishments during the first week of the new federal aid program for restaurants, underscoring concerns that the assistance initiative could quickly run out of money.

The National Restaurant Association and other industry advocates raised those fears last week and said they are already working with lawmakers to replenish the fund, which is intended to help operators with fewer than 20 outlets. Places in need of assistance because of the pandemic can seek up to $5 million for an individual location or $10 million in total.

“The question on the minds of many is what happens when applications outpace the available funds,” Tom Bené, CEO of the National Restaurant Association, said in a recent statement.

Senate Majority Leader Chuck Schumer, D-N.Y., has said he believes more money will be allocated because the Fund, a component of the American Rescue Plan passed in March, appears to have bipartisan support. Although no Republicans voted for the Rescue Plan, at least one, Sen. Roger Wicker, had a hand in drafting and promoting the Restaurant Revitalization Fund provision.

The Fund’s administrator, the Small Business Administration (SBA), said Monday that some operators would likely receive their grants from the Fund starting May 11.

The average award to the 16,000 initial recipients was $125,000. The grant amount is determined by subtracting an applicant’s 2020 revenues and any previous federal aid from the operator’s 2019 revenues.

The money can be spent on most operating expenses, including rent, payroll, food and beverage supplies and debt service. The funds can also be used to build outdoor dining areas.

Publicly owned companies are ineligible.

“We know that this help is urgently needed by so many who have suffered disproportionately from this pandemic and have often been unable to access relief,” SBA Administrator Isabella Guzman said in a statement. “Restaurants are the core of our neighborhoods and propel economic activity on Main Streets across the nation. The SBA is here to help them build resilience to survive this pandemic as we get our economy back on track.”

Priority is still being given by the SBA to applications from women, veterans and the socially and economically disadvantaged because their needs were adjudged to particularly acute. That edge expires on May 24.

The SBA has said it will continue to accept and process applications until the Fund runs out of money. 

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