Restaurants are big beneficiaries of the COVID-19 relief bill

Restaurants devastated by the coronavirus outbreak receive a lifeline from the pandemic relief package awaiting final House approval.

The bill passed by the Senate on Saturday adds money to the paycheck protection program and provides indirect help to small businesses in general through stimulus payments and unemployment benefits. But restaurants received the largest share of direct aid: $ 28.6 billion in grants for restaurants whose revenues fell in 2020 due to the pandemic.

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The bill provides for grants equal to the amount of lost restaurant revenue, up to a maximum of $ 10 million per business and $ 5 million per location. Qualifying companies cannot own more than 20 locations and they cannot be publicly traded. The bill sets aside $ 5 billion for smaller restaurants, those with annual revenues of $ 500,000 or less.

Industry groups have welcomed the subsidies. The National Restaurant Association, an industry organization, noted that the Senate added $ 3.6 billion to the $ 25 billion allocated in the original House bill. While the bill’s $ 28.6 billion was only about a tenth of the amount the industry lost during the pandemic, the restoration group sees it as a victory.

“This will keep the doors open. The smallest and hardest hit will get the help they need most, ”said Sean Kennedy, group executive vice president.

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Restaurants have been decimated by the pandemic which has led to government-ordered closures and which still keeps many diners away. As of December 1, more than 110,000 American restaurants were closed temporarily or permanently, according to the National Restaurant Association. That’s 17% of the number of restaurants in business before the pandemic. In January, industry revenues fell more than 16% from the previous year, the group said.

Small business advocates were happy with the overall bill and said stimulus payments of $ 1,400 to individuals and families along with ongoing unemployment benefits will give consumers more money than they can spend in small businesses. companies.

“Anytime you put money in the hands of consumers, however you get it, it helps small businesses,” said Keith Hall, president of the National Association of the Self-Employed, noting that Main Street businesses such as hair salons likely benefit.

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Congress added more than $ 7 billion to the $ 800 billion allocated to the last round of the PPP which began on January 11. The Small Business Administration has approved $ 680 billion in loans so far this cycle, and a total of $ 1.2 trillion since April.

But small business advocates are worried because the bill did not extend the program, which is expected to end on March 31. Congress can still extend the PPP – it has already passed extensions after the first two rounds of funding ended – but Karen Kerrigan, chair of the Small Business & Entrepreneurship Council, called the bill a “missed opportunity” to improve. small business pandemic relief.

Kerrigan was also concerned that lawmakers did not increase the $ 150,000 limit on SBA economic disaster loans that many companies sought out during the virus outbreak.

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The bill also includes $ 100 million for SBA-sponsored small business development centers and other organizations that provide free advice and education to small businesses. It also contains $ 10 billion for the State Small Business Credit Initiative, a program to help states support small business loans.

Kerrigan was optimistic the bill would have a positive effect on the economy and, in turn, on small businesses.

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“We anticipate an overall improvement that will help fuel the momentum and confidence that is building on Main Street,” she said. But she warned that, rather than spending their stimulus payments, many individuals and families will use that money to save or pay off debts.

“Therefore, small businesses must continue to compete fiercely for the available consumer dollars,” she said.