Restaurants all over the country have cause for a little celebration. Biden’s $1.9 trillion COVID-19 stimulus bill received final approval from the House of Representatives. Next stop, Biden’s desk for a signature (this Friday!) which will see $25 million in – much needed – relief on its way to restaurants.
America’s Rescue Plan
In the works since January, the COVID-19 stimulus bill, or what has become known as “America’s rescue plan” won final approval in the House today after the Senate made a series of revisions to the bill and passed it over the weekend. The legislation, is, for want of a better phrase, absolutely massive. At $1.9 trillion, the cost comes in at roughly double the stimulus package that President Barack Obama signed into law during the Great Recession in 2009. The measure also follows five earlier virus bills totaling about $4 trillion that Congress has enacted since last spring. This all adds up to a huge, unprecedented undertaking to aid the recovery, deliver relief to Americans hurt by the pandemic and ultimately nurse the economy back to health.
Highlights of the legislation include extra unemployment benefits, rental assistance, Covid-19 vaccination funds and direct payments, which, once signed the legislation, are set to start going out this month. While Republicans criticized the $1.9 trillion package as more expensive than necessary one section of the bill they did overwhelming support and agree on was the Restaurant Revitalization Fund (RRF). Introduced and added as a bipartisan, bicameral effort, the restaurant fund will see $25 billion in relief going to small and mid-sized restaurants.
$25 billion restaurant relief – Who gets what
Employing more than 15.3 million people and sales of $863 billion in 2019, the restaurant industry accounts for 10% (!) of the US workforce. With the pandemic continuing to negatively impacting almost every dining and drinking establishment, every week, more restaurants close and record numbers of unemployment claims are filed. It is hoped that the much need Restaurant Revitalization Fund (RRF), will fuel jobs across the country and give employers the support they need, now.
As part of the Restaurant Revitalization Fund, small and mid-sized food and drink entities with 20 locations or fewer will qualify for grants equal to the difference between 2020 and 2019 revenue, up to $10 million per company and $5 million per physical location. The grants may cover such items as payroll, rent and utilities, operational expenses, paid sick leave, food and beverage expenses, maintenance expenses, and more. The fund also has earmarked $5 billion for applicants with revenue of $500,000 or less and $20 billion for “eligible entities of different sizes based on annual gross receipts.” Furthermore, the bill provides an additional $7.25 billion for the Paycheck Protection Program, which provides small businesses with the potential for 100% forgivable loans.
So, for restaurants, bars and other food service businesses that do avail of and receive grants through the relief package they would not need to pay them back as long as they use the funds for essential operating expenses such as payroll, mortgages, rent, utilities, and personal protection equipment.
When the bill goes into effect, the application process will prioritize restaurant businesses that have traditionally had the deck stacked against them – “During the initial 21-day period in which the administrator awards grants under this subsection, the administrator shall prioritize awarding grants to eligible entities that are small business concerns owned and controlled by women…, small business concerns owned and controlled by veterans…, or socially and economically disadvantaged small business concerns.”
Regardless of who’s at the top of the queue, the bill is seen as a valuable first step in helping independent restaurants recover from the huge toll the past year has taken on restaurants, especially small to medium-sized businesses (SMBs). It is widely hoped that with this new relief, that businesses can finally get back to work and that the local independent restaurants can keep their doors open while simultaneously laying the groundwork for a full economic recovery… According to some analyses, the latest relief bill could actually put the economy in even stronger shape than it was before the Covid-19 pandemic.
Now, that is something we can all get behind – and look forward to.