The restaurant industry is finally getting its own bailout plan, but whether there is enough to do remains an open question.
President Biden last week signed a $ 1.9 trillion coronavirus relief and stimulus package, including $ 28.6 billion, specifically for the struggling restaurant industry. It is the largest financial aid program ever targeting the US restaurant industry.
To be eligible, restaurants with fewer than 20 locations must deduct their 2020 earnings from their 2019 earnings and submit their claims for the difference, minus any Paycheck Protection Program funding received last year. The Small Business Administration is expected to begin processing applications in the coming weeks.
The problem is, the process is expected to be slow – and even with 110,000 restaurants closed last year, there isn’t enough money set aside to make up for the estimated $ 255 billion in total losses the foodservice industry suffered last year. . of the pandemic, experts said.
“It’s a great start, but it takes about five seconds,” said restaurant advisor Rick Camac.
Erika Polmar, executive director of the Independent Restaurant Coalition, says it will push for pool renewal until everyone gets paid. In the meantime, restaurateurs worry they could be left out in the cold, even if they dream of what they could do with the money.
Ayala Donchin, chef and CEO of Evelyn’s Kitchen in Harlem, was among those who missed the first round of PPP funding as banks that partnered with the SBA famously distributed funds to large, established companies such as the Los Angeles Lakers and Ruth’s Chris Steak restaurant.
Donchin, who called the first round “extremely demoralizing,” managed to hold back the next rounds of PPP funding, but that money was – by law – set aside for payroll.
Leaving behind some of the restaurant’s bailout, which can be used for virtually any business expense – from rent, to supplies, to food and improvements – she plans to use it to restore her crumbling infrastructure and make her online sales. expand.
‘The ovens. The Lightning. A sign in the front. Broken cabinet doors – and adding packaging to expand our ability to ship items nationally, ”said Donchin.
Still, she is concerned. ‘We don’t have the money yet. And it may not come for another eight to 12 weeks. We are still in survival mode and there is no way to plan without having the money. ”
Biden has vowed that the application process will start ‘within weeks, not months’. But even after it opens, the process is expected to be slowed down by attempts to address some of the issues that plagued the first round of PPP lending.
For the first three weeks, the SBA prioritizes subsidies to restaurants owned by women, veterans, and anyone deemed socially and economically disadvantaged.
Then, for the first two months, you only need to enroll restaurants that brought in less than $ 500,000 in annual sales in 2019. After that, individual restaurants can apply for up to $ 5 million and restaurant groups can apply for up to $ 10 million.
Money that has not been spent at the end of the year must be returned.
Restaurateur James Mallios, owner of the Greek restaurant Amali in Midtown and Bar Marseille in the Rockaways, said he would use the money to hire more staff and build more outdoor seating – and to rebuild wine lists “after he almost frozen a purchase for a year ”.
He called the act a “ lifeline, ” despite knowing the money could run out before he gets some of it. “I hope we get our scholarship, but even if we don’t and no more money is made available, it gives us an emotional wind in our sails.”
New York City’s restaurants and bars generally feel more optimistic after a harsh winter. Indoor dining capacity, which resumed at 25 percent in February, is now 35 percent, rising to 50 percent on March 19.
But they still hurt. There were 25,000 food and beverage outlets in the city before the pandemic hit. About 5,000 of those bars and eateries were closed during the pandemic, according to the Partnership of New York.