COVID Federal Restaurant Grants Almost Wiped Out, SBA Says
The amount requested from a federal grant program for restaurants, bars and caterers hit hard by the pandemic is more than double the funding available, President Joe Biden’s small business chief told Newsday.
The Restaurant Revitalization Fund, or RRF, has received requests for $ 65 billion nationwide since it opened on May 3. That is compared to the nearly $ 29 billion allowed by Congress and Biden in March.
“We expect to be completely short of funds at this time,” Isabella Casillas Guzman, director of the US Small Business Administration, said in an interview with Newsday on Friday. “The demand is, as expected by the [restaurant] industry, far higher than the $ 28.6 billion “allocated to the RRF,” she said.
Funding is divided into “buckets” to ensure that some businesses are not left behind. The $ 500 million bucket meant to help small restaurants, food trucks and small caterers with gross receipts of less than $ 50,000 in 2019 still has funding, Guzman said. “But if not, the funds are definitely oversubscribed.”
She said the SBA was keeping Congress informed of the RRF’s progress. Guzman noted that $ 2.7 billion has been distributed to 21,000 businesses across the country so far – all owned by women, veterans or members of minority groups, or are located in poor neighborhoods. Wider distribution begins on May 24 and more than 265,000 entries have been received.
The RRF consists of grants of up to $ 10 million per business to offset lost revenue during the COVID-19 pandemic. The funds can be used to pay employee salaries, mortgage and rent payments, utility bills, unpaid debts, and other operating expenses. The money must be used before March 11, 2023.
The RRF is the second SBA coronavirus relief program to run out of money this month.
The Paycheck Protection Program, which consists of federally guaranteed loans from banks and other private lenders to businesses and nonprofits, has used up its $ 291 billion in loan guarantees.
The PPP started a year ago and ran out of initial guarantees in two weeks before Congress allowed more.
Guzman said Friday that the agency’s Economic Disaster Lending Program, or EIDL, and the Closed Site Operator Grant program, or SVOG, still had money.
More than 10,000 SVOG applications have been received since April 26, when the SBA restarted the program after a “first technological hiccup” closed the online application portal before forms could be accepted. “We are starting to process these grant applications,” she said.