Recently, the U.S. passed a $1.9T stimulus to get the country back on its feet. Most restaurants still struggle to bring in as much business as before. The economy will also need a boost to convince Americans, who have had significant financial difficulties this year, to spend more money dining out even after we see the other side of this. That’s what the American Rescue Plan intends to do.
The stimulus sets aside $28.5B for the Restaurant Revitalization Fund. The Small Business Administration will distribute grants to those small businesses hit the hardest by COVID-19. This past year, restaurant sales fell by hundreds of billions of dollars and 110K restaurants closed forever. The American Rescue Plan is the first step toward widespread industry recovery.
What does the ARP do?
When the plan got signed, the National Restaurant Association disseminated information about what it is and why it’s important. This stimulus package gives restaurants much-needed tools to make future investments or restock on needed assets and inventory so they’re ready to meet the post-pandemic world with open arms.
This is the second and more productive stimulus plan for restaurants. PPP loans distributed last year insufficiently covered the industry, thus so many restaurants closed because they couldn’t pay their workers, rent, and other expenses. This new stimulus aims to guide them through the final stages of the pandemic until enough people get vaccinated, and states relax their capacity restrictions, for them to make revenue through sit-down service again. As we enter the recovery stage, restaurants are eager to keep their doors open through the home stretch.
How can restaurants spend the money?
Of the $5B earmarked for small businesses, the rest will be distributed to different-sized restaurants based on annual income. They define “small business” as those who make less than $500K annually in gross revenue.
The package covers restaurant expenses made between February 15, 2020, through the end of this year. It covers rent, utilities, PPE, sick leave, payroll for certain employees, operational and supplier costs, food and beverage expenses, building an outdoor seating space, maintenance repairs, and other critical purchases that independent restaurants need to stay open and successful.
Note that lately, Americans have pushed for higher wages, greater benefits, and better working conditions for low-income workers. Although the proposed $15/hr minimum wage didn’t pass Congress, the proposition nevertheless demonstrates that it’s a prevalent concern. It will be good to have money set aside in these grants for payroll, even just the usual payroll expenses, when sit-down service returns in force with a full staff hard at work.
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Through COVID-19 and beyond
The future remains precarious between evolving restrictions, loosening safety regulations, vaccine rollout, and the virus itself developing new strains. The Restaurant Revitalization Fund part of the American Rescue Plan aims to reduce some of the uncertainty and get the foodservice industry through the rest of the year.
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