After the U.S. House of Representatives passed the Restaurant Rescue Plan, which sets aside $25 billion for restaurants impacted by the pandemic as part of the Biden administration’s American Rescue Plan stimulus package, the bill headed to the Senate. On Saturday (March 6), the Senate passed the bill with an additional $3.6 billion, totaling $28.6 billion for restaurant relief, reports Restaurant Business, and the House is expected to approve this provision on Wednesday (March 10).
The maximum grant amount is $5 million for a single restaurant location, or $10 million for a restaurant with multiple locations. Grants will be administrated by the Small Business Administration (SBA). For the first three weeks, the SBA will prioritize many restaurant businesses that have traditionally had the deck stacked against them. As the bill states: “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.”
The bill can serve 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). Though the allocated relief is a smaller order of magnitude than the hundreds of billions in losses already sustained by the industry, it will at least begin to set the industry back on the right path. The bill specifies that these grants can be used to cover payroll costs, “payments of principal or interest on any mortgage obligation,” rent, utilities, maintenance costs, supplies including PPE and sanitation products, food and beverages costs, supplier costs covered by the Small Business Act, operational expenses, paid sick leave and “any other expenses that the administrator determines to be essential to maintaining the eligible entity.”
As the bill goes into effect, these funds will give restaurant owners a chance to take greater advantage of the tailwinds coming in the next few months, as an increasing number of vaccinated consumers return for indoor dining, and as warmer temperatures bring customers back for outdoor dining without requiring any costly heating solutions.
“The Senate passage of the American Rescue Plan means we have turned the corner and can see the finish line,” National Restaurant Association Executive Vice President for Public Affairs Sean Kennedy said in the association’s official statement. “We appreciate leadership’s continued support of the Restaurant Revitalization Fund and the other programs in this bill that will support restaurants across the industry to put us on the road to recovery.”
Not only will the bill directly grant restaurants relief, but it will also provide low- to middle-income consumers with $1,400 stimulus checks, offering a potential source of additional revenue for food service establishments. After all, the last couple rounds of stimulus checks have boosted restaurants’ revenues, though these boosts tend to provide short-lived spikes rather than lasting growth. The bill would also extend unemployment benefits through September at $300/week, of which restaurants could see a small portion.
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