The restaurant industry is finally getting its own rescue aid – but whether it is enough to move remains an open question.
President Biden signed a $ 1.9 trillion coronavirus aid and stimulus package last week, which included $ 28.6 billion allocated specifically to the troubled restaurant industry. It is the largest financial aid program ever targeted at the US restaurant sector.
To qualify, restaurants with less than 20 locations must deduct 2020 revenue from 2019 revenue and apply for the difference – minus any funding from the Salary Protection Program received last year. The Small Business Administration is expected to start implementing in the coming weeks.
The problem is that the process is expected to be slow – and even with 110,000 restaurants closing last year, there is not enough money allocated to offset the total losses estimated at $ 255 billion suffered by the food service industry last year pandemic, experts said.
“It’s a great start, but it will work in about five seconds,” said restaurant consultant Rick Camac.
Erika Polmar, executive director of the Independent Restaurant Coalition, says she will demand that the pool be renovated until everyone is paid. Meanwhile, restaurateurs are worried that they might be left in the cold, even if they dream of what they could do with the money.
Ayala Donchin, chief executive officer and CEO of Evelyn’s Kitchen in Harlem, was among those who missed the first round of PPP funding as banks collaborating with the SBA distributed funds to large, well-known companies such as the Los Angeles Lakers and Chris. Ruth Steakhouse.
Donchin, who called the first round “extremely demoralizing”, managed to catch subsequent rounds of PPP funding, but that money was set aside – by law – for pay.
If he understands some of the restaurant’s salvage, which can be used for almost any business expense – from rent, supplies, food and improvements – he intends to use it to repair decaying infrastructure and expand sales. online.
“The ovens. Lighting. A sign in front. Cabinet doors that are broken – and the addition of packaging to expand our ability to ship items nationwide, ”said Donchin.
However, she is worried. “We do not have the money yet. And it may not come for eight to 12 weeks. We are still in survival mode and there is no way to plan without money. ”
Biden promised that the application process would open “in a few weeks, not a few months.” But even after the opening, the process is expected to be slowed down by efforts to eliminate some issues that affected the first round of PPP loans.
In the first three weeks, the SBA will give priority to grants for restaurants owned by women, veterans and anyone else considered socially and economically disadvantaged.
Then, in the first two months, only restaurants with annual revenues of less than $ 500,000 in 2019 should apply. After that, individual restaurants can claim up to $ 5 million, and restaurant groups can claim up to $ 10 million. of dollars.
Money not spent by the end of the year must be returned.
Restaurateur James Mallios, owner of the Greek restaurant Amali in Midtown and Bar Marseille in Rockaways, said he will use the money to hire more employees and build more outdoor venues – as well as rebuild wine lists “after the freeze acquisitions for almost a year ”.
He called the act a “lifeline” despite knowing that money could run out before he received anything. “I hope to receive our grant, but even if we don’t do it and no more funds are available, it gives us emotional wind in the canvas.”
New York restaurants and bars feel more optimistic after a generally harsh winter. The indoor dining capacity, which was resumed in February at 25%, is now at 35% and rises to 50% on March 19.
But they still hurt. There were 25,000 food and drink units in the city before the pandemic hit. About 5,000 of these bars and restaurants closed during the pandemic, according to the New York Partnership.