Joyce M. Rosenberg
Restaurants ravaged by the coronavirus outbreak are receiving a lifeline from President Joe Biden’s pandemic relief package.
The COVID-19 Aid Act adds money to the paycheck protection program and generally provides indirect help to small businesses through stimulus payments and unemployment benefits. However, most of the direct aid went to restaurants: $ 28.6 billion in grants for restaurants whose revenues declined in 2020 due to the pandemic.
The bill provides grants equal to the restaurant’s lost revenue, up to a maximum of $ 10 million per business and $ 5 million per location. Eligible companies may not have more than 20 locations and may not be publicly traded. The bill provides $ 5 billion for the smallest restaurants with annual sales of $ 500,000 or less.
Industry groups welcomed the grants. The National Restaurant Association, an industry body, noted that the Senate added $ 3.6 billion to the $ 25 billion envisaged in the original House bill. While the $ 28.6 billion on the bill was only about a tenth of the money the industry lost during the pandemic, the restaurant group sees it as a profit.
“It will keep the doors open. The smallest and most severely affected will get the help they need most,” said Sean Kennedy, group executive vice president.
Restaurants have been decimated by the pandemic that resulted in government-ordered closings and still keeps many diners away. According to the National Restaurant Association, as of December 1, over 110,000 U.S. restaurants were either temporarily or permanently closed. That’s 17% of the number of restaurants that were open before the pandemic. In January, industry-wide sales fell by more than 16% compared to the previous year, the group announced.
Small business advocates were happy with the overall bill, saying the $ 1,400 stimulus payments to individuals and families, as well as continued unemployment benefits, will give consumers more money to spend in small businesses.
“Every time you put money in the hands of consumers, no matter how it gets there, it’s helping small businesses,” said Keith Hall, president of the National Association for the Self-Employed, noting that Main Street- Companies like hair salons do this likely to benefit.
Congress added more than $ 7 billion to the $ 800 billion allocated for the final round of PPP, which began Jan. 11. The Small Business Administration has approved approximately $ 680 billion in loans so far this round, and a total of $ 1.2 trillion since April.
Small business advocates are concerned, however, because the bill did not extend the program, which ends March 31, The Business & Entrepreneurship Council called the bill “a missed opportunity” for improvements in pandemic aid to small businesses.
Kerrigan was also concerned because lawmakers didn’t increase the $ 150,000 SBA disaster loan limit for economic violations that many companies applied for during the virus outbreak.
The bill also provides $ 100 million for SBA-sponsored small business development centers and other organizations that provide free advice and training to small businesses. It also includes $ 10 billion for the State Small Business Credit Initiative, a program designed to help states provide loans to small businesses.
Kerrigan was optimistic that the bill would have a positive impact on the economy, and thus on small businesses.
“We expect an overall increase that will help build the momentum and confidence that is building on Main Street,” she said. However, she warned that many individuals and families would rather use the money to save or reduce debt than spend their stimulus payments.
“As a result, small businesses must continue to compete fiercely for available consumer dollars,” she said.