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Melissa Hom
March 11, 2021
What The New Federal Stimulus Package Means For America’s Restaurants
We read through the legislation so you don’t have to.

On Saturday, March 6th, the Senate passed legislation that gives restaurants $28.6 billion in federal relief. That number accounts for a small piece of the new $1.9 trillion stimulus pie officially called the American Rescue Plan Act of 2021 - which changed slightly since it was originally introduced by the Biden administration in January.

The bill was then passed once again in the House on Wednesday, March 10th, ahead of the Democrat’s original March 14th deadline. On Thursday, March 11th, President Biden signed the package into action.

There’s a encyclopedia-length stimulus plan laid out in the new legislation, including a child tax credit that sends monthly payments to parents across the country, and $1,400 payments for anyone making less than $75,000 a year (or couples making less than $150,000).

If you have time to read it all, please enjoy. If not, here’s what’s in it for restaurants owners and workers:

Eligibility For All Restaurants & Bars

Restaurant relief is available to any restaurant, food stand, food truck, food cart, caterer, saloon, inn, tavern, bar, lounge, brewpub, tasting room, taproom, or facility with an alcohol license. Yes, even airport restaurants. We repeat, the bill specifies airport restaurants.

Continued Unemployment Benefits

Unemployed individuals (including but not limited to restaurant workers) will continue to receive a weekly $300 supplemental bonus on top of regular unemployment payments through September 6th.

How Much Relief Can A Restaurant Receive?

Restaurant groups can apply for a maximum grant of $10 million, individual restaurants can apply for a maximum grant of $5 million.

How Grants Will Be Calculated

Grant eligibility is calculated by what the bill calls “pandemic-related revenue loss” or the difference between a particular restaurant’s 2020 sales and their 2019 revenue, minus whatever amount of PPP loans a restaurant may have already received in prior rounds of federal relief. Essentially, the stimulus package’s goal is to try to make up for lost funds due to the pandemic, while taking into account which restaurants have already seen federal aid.

If a business wasn’t open in 2019, the grant administrator looks at the restaurant costs incurred “minus the gross receipts received.”

The American Rescue Plan’s restaurant relief money pot reserves $5 billion of grants for restaurants with revenues of less than $500.000 in 2019, which theoretically is targeted towards small, independently-owned businesses. That’s a little less than a fifth of the entire relief package.

What Restaurant Relief Can Cover

Grants can cover anything from mortgage and rent, payroll and employee benefit costs, PPE, sick leave for employees, food costs, as well as operational expenses like utilities and maintenance. In essence, mostly anything the grant administrator is down with.

Restaurants who receive grants can use their federal aid money for expenses dating back to the start of the pandemic (February 15th, 2020) all the way through December 31st, 2021. If things get worse in the coming months, grant funds may be eligible for longer use.

How Is This Actually Going To Happen?

The federal government is required to let restaurants know about the new aid opportunities. There will be a phone hotline, websites, and outreach in the 10 languages most commonly spoken in the U.S.

If you’re a restaurant owner and you want to learn more about applying for a restaurant relief grant, the Independent Restaurant Coalition is working with the White House and the Small Business Administration to help make the application process run efficiently. Sign up for their newsletter here to get up-to-date information.

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