The $ 1.9 trillion federal stimulus package includes $ 28.6 billion for restaurants alone, but officials expect demand to far outstrip supply, leaving many businesses with no chance of ‘acquire help.
Grants will be distributed through the Small business administration – who did not announce the exact start date of the application period. But industry leaders expect it to be from mid-April to the end of April, and a flood of apps within minutes is likely.
“Get in as quickly as possible,” said Justin Winslow, president and CEO of the Michigan Restaurant and Lodging Association.
Restaurants can get up to $ 5 million and restaurant groups can get up to $ 10 million in total. Only businesses that own / operate 20 restaurants or less are eligible.
Here’s how the funding formula works: Take the gross income for 2019, subtract the gross income for 2020, and subtract all amounts received from the paycheck protection program funding. This is the maximum amount each business is eligible for.
The idea is to compensate for the losses caused by the pandemic in 2020.
While app details aren’t ready yet, executives say business owners need to get their papers in order now so they can pounce once the window opens.
“There’s probably a very strong chance that runs out almost instantly,” Josh Fendrick, legislative assistant to US Senator Gary Peters, Township of D-Bloomfield, said in a webinar with restaurateurs. “We heard Senator Majority Leader (Chuck) Schumer say that if this happens there will be opportunities to replenish the fund.”
Winslow is hopeful that more money will eventually be added to the pot.
“The biggest concern is, what if I’m really in need and can’t find an opportunity here, will there be something else?” Winslow said. “It’s the multibillion dollar question.”
The $ 28.6 billion Restaurant Revitalization Fund sets aside $ 5 billion for restaurants with gross revenues of $ 500,000 or less in 2019. It also reserves the first 21 days of the claim period for owned businesses. to women, veterans and minorities.
Large businesses took advantage of early aid programs, leaving many small businesses with the crumbs. This fund does a better job of making sure small businesses in need are the first to come online, Fendrick said.
“We saw Ruth’s Chris Steak House, Shake Shack, the LA Lakers were among the first to get the P3 loans,” Fendrick said. “This was clearly not the intention of Congress.”
The $ 28.6 billion isn’t split evenly across states, so it’s unclear how much Michigan restaurants could get. The MRLA has an information page on its website to help homeowners apply.
Applications will go through the SBA – unlike PPP loans, which were administered by local banks and credit unions.
Money can be used for qualifying expenses between February 15, 2020 and December 31, 2021. It can be spent on mortgages, rent, payroll, utilities, personal protective equipment, construction to add outdoor seating, paid sick leave and more.