Onsite restaurants, bars and other small businesses offering food and drink are vital to our communities and our economy. From big cities to small towns, these restaurants and bars provide a place for communities to come together, celebrate and share ideas. They also employed nearly 12 percent of all workers before the pandemic. Despite their importance, restaurants and bars suffered badly during the pandemic.
The Biden-Harris administration has made supporting small businesses – including small restaurants and bars – a top priority.
Established as part of the American Rescue Plan (ARP), the Biden-Harris administration recently launched the Restaurant Revitalization Fund (RFF) – a $ 28.6 billion program to help restaurants, bars, catering trucks and other catering establishments. During the first two days of the program:
- 186,200 restaurants, bars, and other qualifying businesses in all 50 states, Washington, DC, and five U.S. territories have sought relief.
- 97,600 requests came from restaurants, bars and other eligible businesses owned and controlled by women (46,400), veterans (4,200), socially and economically disadvantaged people (30,800) or a combination of all three ( 16,200).
- 61,700 requests were from companies with annual revenues before the pandemic of less than $ 500,000, which represents some of the smallest restaurants and bars in America.
Under the RRF, restaurants and bars are eligible for grants equal to their lost revenue from the pandemic, with a cap of $ 10 million per business and $ 5 million per location. Funds are available for certain qualifying uses, such as payroll and rent.
While all small businesses are welcome to apply, by law, the SBA will prioritize funding applications from small businesses owned and controlled by women, veterans, and the socially and economically disadvantaged for the first 21 days. from the program. After the 21 days, all eligible requests will be funded on a first come, first served basis.
In addition to the 21-day priority period, the Biden-Harris administration is taking action to ensure the equitable distribution of relief by establishing $ 9.5 billion in set-aside contracts for smaller restaurants and bars – including millions of dollars for restaurants, bars and food trucks with less than $ 50,000 in revenue.
In addition to the RRF, in its first 100 days, the administration approved $ 31 billion in Paycheck Protection Program (PPP) loans, $ 438 million in COVID-19 economic disaster loans (EIDL) and over $ 29 million in advance grants targeted at EIDL. to restaurants and bars across the country. The administration’s national vaccination strategy and direct support to working families have also helped restaurants and bars reopen, rehire and return to normal operations. While the administration remains focused on helping these restaurants and businesses make ends meet, the data suggests that the overall outlook for the industry has improved in recent months:
- The restaurant industry has added 450,000 jobs since January.
- The share of restaurant and bar owners planning to hire in the next six months nearly doubled, from just 30% in January to over 57% in mid-April.
- The share of restaurant and bar owners who have resumed normal activities has more than doubled since January, and the share who plan to resume normal activities in the next six months has risen from just 17% to over 26%.
Unfortunately, many restaurants and bars remain partially closed, with reduced incomes and large debt linked to the pandemic. In the coming weeks, the Administration will prioritize granting RRF assistance to hard-hit businesses so that they can keep their doors open.
American restaurants and the COVID-19 pandemic
Before the COVID-19 pandemic, the restaurant and bar industry was one of the fastest growing sectors in the U.S. economy. From 2009 to 2019, the number of restaurants, bars and other places to eat increased by 19%, from 548,000 establishments to 654,000 establishments. During the same period, employment increased by 28% (or 2.7 million jobs), from 9.4 million to 12 million employees. And the industry’s annual retail sales grew 70%, from $ 453 billion to $ 774 billion. In 2019, this industry represented 2.3% of US GDP.
The restaurant industry has suffered disproportionately during the pandemic. Almost half of all workers in restaurants, bars and other food establishments (6 million people) lost or quit their jobs between February and April 2020. While employment has rebounded with the easing of closures and restrictions linked to the pandemic, the industry was still down 2.3 million. at the end of 2020. The industry added 450,000 additional jobs between January and March 2021, but remains down 1.8 million jobs compared to February 2020. In line with the decline in employment, sales Monthly retail in restaurants, bars and other food and beverage businesses fell by more than half in the early months of the pandemic, from $ 66 billion in February 2020 to $ 30 billion in April 2020. The sector ended the year with $ 623 billion in retail sales, down 19% from 2019. Restaurants and bars permanently lost during the pandemic may not be known for some time, Research suggests that more than 400,000 small businesses across all industries have closed for good and millions more are struggling to make ends meet.
Recent efforts by the Biden-Harris administration to support restaurants and bars
In just 100 days, the Small Business Administration (SBA) provided more than $ 31 billion in relief to restaurants and bars. Specifically, the SBA has:
- Approved more than 337,000 forgivable loans worth $ 31 billion to small restaurants and bars under the Paycheck Protection Program. The PPP has served as a lifeline for millions of businesses that have struggled to stay open during the pandemic. By implementing a series of program and policy changes to improve access for sole proprietors, open the program to business owners with student loans past due before non-fraudulent crimes, and engage in awareness raising and targeted education targeting smaller businesses, the 2021 cycle of the PPP. also saw real improvements in the equity of outcomes. Across all sectors, 95% of PPP loans went to businesses with less than 20 employees, while the share of PPP funds going to rural businesses has increased by 20% since the 2020 program cycle. In addition, the average amount loans in 2021 is approximately $ 45,700, down more than half from an average amount of $ 101,000 in 2020.
- Approved more than 4,000 low-interest long-term loans worth $ 438 million to small restaurants and bars under the EIDL COVID-19 program. The EIDL COVID program has enabled millions of small businesses – including small restaurants and bars – to meet their financial obligations and operating expenses in the wake of the pandemic. In 2021, the Biden-Harris administration took steps to increase the amount of support available under the COVID EIDL program by increasing the loan limit to 24 months of economic harm with a maximum loan amount of $ 500,000. This summer, the SBA will further increase the COVID EIDL loan limit to $ 2 million, which is the maximum allowed by law. These changes will unlock billions of dollars in additional funding for restaurants and bars that previously received the maximum loan amount.
- Approved $ 29 million in EIDL targeted flexible advance grants to over 4,000 hard-hit small restaurants and bars in low-income communities. The COVID-19 Targeted EIDL Advance program provides advance funds of up to $ 10,000 to small businesses – including small restaurants and bars – that are located in low-income communities and have suffered revenue losses of more than $ 30. %. President Biden’s US bailout included an additional $ 5 billion for the targeted additional EIDL Advance program, which will provide grants to the smallest and hardest-hit businesses in America, including many restaurants and bars.