How Eating places Are Prepping for a $28.6 Billion Grant Program

Members of Congress should have no problem getting restaurant reservations this summer. “Right now, we are deeply grateful,” said Sean Kennedy, executive vice president of public affairs for the National Restaurant Association.

And why not. The $ 1.9 trillion American Rescue Plan Act finally fulfills a central need for an industry that has been crushed by Covid-19: cash grants – no loans. Specifically, the Permitting Act approves a $ 28.6 billion grant program for badly hit food service companies known as the Restaurant Revitalization Fund (RRF). This program allows eligible businesses to apply for non-repayable grants – a key element for low-margin businesses like restaurants.

Not every business owner is so enthusiastic about the rescue act. Some were dismayed that the law did not extend the paycheck protection program despite widespread delays. (An extension is in the works. The House passed a bill extending the PPP for 60 days on Tuesday, and the Senate is now in a similar move.) Others were stunned by the small amount of aid that small businesses in general are providing has been. After all, $ 50 billion is only 2.5 percent of the total package.

But the catering industry got exactly what it ordered. “What we predicted in March [of 2020] was that this would be an earthquake, a tidal wave, [and] A tsunami for an industry that only achieved a profit margin of 6 percent in a good month, “says Kennedy.” We wrote the Congress and looked for a number of ways we could get help. “At the top of the list was an industry-specific grant program.”

The grant, which can only be used for explicit purposes such as rent, payroll, utilities, PPE, and supplies, is capped at $ 5 million per location for a total of $ 10 million. Only food service businesses – including bars, restaurants, and caterers – with fewer than 20 locations are eligible. Those who have received PPP loans can apply for free.

Delays in spite of necessity

There is still no date for the start of the RRF. Some business owners considering a similar program for live venues, museums, and event organizers – the Shuttered Venue Operators Grant (SVOG) program, which has not yet been launched – have expressed concerns about possible delays.

“We feel like we’re on a constant roller coaster ride with daily ups and downs,” says Maxine Turner, founder of Cuisine Unlimited, a Salt Lake City catering company that has seen sales down 85 percent since 2019. The deal this year hit one Sales of $ 5 million. She expects to receive more than $ 700,000 from the RRF program once it starts – and she’ll be putting it all back into her business, cutting some of it away to pay her tax bill. Currently, Utah is one of 19 states that tax PPP revenue earned.

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The money, she adds, is needed now. “As an event company, we worry that we don’t have any events yet [we’re] concerned about a third surge, “she says.” If we open too early we will have an increase and be forced to close again or limit capacity … Europe is going through this. “

The SBA, for its part, worked overtime to get both programs up and running. Regarding the SVOG, which was approved under the Consolidated Appropriations Act on December 27, 2020, the SBA says it is now planned to launch sometime “early April”. SBA spokeswoman Andrea Roebker points out the complexities of paying out funds directly to business owners, which the agency typically doesn’t. The main programs provide government-backed guarantees to banks that provide small business loans.

Try to be patient, says Roebker, and register with the various systems the SBA uses to manage the programs if you haven’t already: “The SBA built the program from the ground up and is working quickly to Ensure this. All federal grant application / award process and front-end protection are in place to ensure that these vital grants are given to those who the law is supposed to support. We do not currently have an accurate estimate of the federal grant application / award process At this time, prospective applicants can work to register in the federal government’s System for Award Management ( as this is required for a company to receive an SVOG. “

SAM registration, the system used by contractors wishing to work with the federal government, is required for the RRF program, as is obtaining a DUNS number. To obtain a Data Universal Numbering System, contact Dun & Bradstreet. Both steps are free, but can take up to two weeks.

High priority

Women-owned companies receive dibs in RRF. During the first 21 days of the program, the SBA was instructed to prioritize requests from restaurants owned, operated or controlled by women. Veterans and socially and economically disadvantaged people also come into line.

Thanks to this particular window, Sara Dima is optimistic that she will receive funding from the RRF. She is the co-founder of R&D Foods, a convenience and specialty grocery store in Brooklyn, New York. Based on her calculation on the back of the napkin, her company will receive an additional $ 50,000 to $ 75,000 in grants. She also applied for and received two PPP loans. With the additional scholarship, she wants to pay off her debts, which have metastasized during the pandemic. “Honestly, we’re so far behind on our vendor debt due to last year’s Wonky earnings that I would use it to get those invoices back on-term. I also have a small loan – less than $ 20,000 – with me bad interest rate that I could try to pay off. “She adds that part of the funds would be paid out as compensation. She and R&D co-founder Ilene Rosen barely took a salary last year so they could hit payroll, pay salespeople, and pay rent.

Of course, there are many hard-hit companies that were not started by people in these groups. Depending on demand, these companies may not get the funding they need, Kennedy suggests. “Will it be enough? There’s a good chance it isn’t. And we’ll cross that bridge when we get to.” He adds that even if the $ 28.6 billion program isn’t enough, “it will still save tens of thousands of restaurants across the country.” According to the latest preliminary data from the Bureau of Labor and Statistics, there were 657,670 private dining and drinking establishments in the US in the third quarter of 2020. As of February of this year, these facilities employed nearly 10.3 million Americans.

There is also reason to be optimistic that the SBA will launch the RRF shortly, says Kennedy. The SBA has announced that it will transfer some of its best practices in creating the SVOG program to the RRF. “You are developing a lot of skills in creating the closed venue program that will help launch the Restaurant Revitalization Fund in a timely manner.”

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