When the coronavirus pandemic hit last spring, La Cabaña restaurant in West Tampa closed its doors. Renovation and expansion projects have been put on hold.
“Like most people, our reaction was, ‘Let’s get it under control’. Let’s close it, ”said owner Jonathan Betancur. “Fortunately, we didn’t have to shut it down for too long. “
Betancur, 33, applied for a loan from the Paycheck Protection Program, federally-backed small business assistance provided through the CARES (Coronavirus Help, Relief and Economic Security) law. In a few weeks, his Colombian restaurant obtained a loan of $ 82,650.
It helped me. But not as much as he could have.
“Thanks to our community, we are always here,” Betancur said. “P3 is a great help, but it won’t keep your business alive in the long run.
Almost a year after the start of the pandemic, Congress is preparing another massive allocation of aid to restaurants and bars, part of the sector that has seen by far the most job losses of any sector over the course of of the past year.
According to data from the US Department of the Treasury, the first round of Paycheck Protection Program loans spent more than $ 42 billion in food service, entertainment and hospitality businesses. The second round, which opened in January, made these companies eligible for slightly larger loans than the other entities.
The $ 1.9 trillion US bailout, which is slated to go through the US House of Representatives, goes even further with a provision called the Restaurant Revitalization Fund: $ 25 billion in debt-free grants for a range of food and beverage businesses, from breweries and caterers to saloons, inns and food carts.
“We have included additional support for restaurants because they have been hit particularly hard,” said Rep. Kathy Castor, D-Tampa. “We’re concerned that the PPP, by the March deadline, will run out and our restaurants will still be competing for those dollars.”
These “flexible and fairly distributed grants will help them get back on their feet and put the disaster behind them,” she added.
The grants would be based in part on the difference between a restaurant’s gross revenue in 2019 and 2020, and capped at $ 10 million per business. About $ 5 billion would go to small restaurants that generated gross revenue of less than $ 500,000 in 2019. And for the first 21 days, applications priority would go to businesses owned by women, veterans, and individuals. living in socially and economically disadvantaged areas.
Richard Turner, general counsel and senior vice president of government relations for the Florida Restaurant and Lodging Association, called the grants “a lifeline … designed for those who need it most.” Even if other aspects of the bill eventually change, he believes the grants will survive.
“This particular layout will likely outlive the struggle between the chambers,” Turner said. “I think everyone is feeling good about it, and it’s a worthy cause, and I think it will be faster than some other government programs.”
Unlike Paycheck Protection Program loans, grants will not be open to chains that own or operate more than 20 sites. Restaurants would be required to return any amount in excess of their gross receipts in 2020, as well as any money that did not go towards qualifying expenses such as payroll, rent, utilities, and food or supplier costs.
Beyond that, the biggest concern for restaurants might be timing. The bill has yet to be passed by the Senate, and even then the deployment of the grants could take weeks.
Consider another long-awaited aspect of the latest stimulus bill in December: Subsidies to operators of closed sites, $ 15 billion in aid to concert halls, theaters, museums, zoos and other places of entertainment. More than two months after the law was passed, the US Small Business Administration has yet to explain how and when these businesses can apply for grants.
“He’s dragging his feet a bit to be released, but I’ve had a lot of clients who have contacted me who are eager to get this program started, so I hope it gets wild very soon,” said Bill Burnham, a consultant with the Small Business Development Center at the University of South Florida.
Burnham and Castor described the venue’s grants as “imminent,” although neither know an exact date. But with the Paycheck Protection Program loan window set to close on March 31, the venues subsidy and restaurant subsidies – whenever they arrive – are likely to get additional looks from these. companies.
In La Cabaña, Betancur did not apply for a second loan from the Paycheck Protection Program, but said it would review the grant program once more details were released. So far, it has focused on staying afloat at 50 percent of its capacity, with around 60 percent of its staff in place. The only way to do this is to continue serving customers.
“It’s definitely the community, our customers, the customers, that have kept us here,” he said. “These people have mobilized a lot, and I thank them every day for that.”