Last week, the unthinkable happened: the government agreed on something. In an almost unanimous decision, the U.S. Senate approved an amendment that would provide financial relief to service industry businesses impacted by the Covid-19 shut-downs. That same week, an even more promising bill reappeared on the Senate floor.
So, what do these proposals actually mean and how do they affect you? Read on to find out.
What is the Restaurant Rescue Plan?
Senate Amendment 261, better known as the Restaurant Rescue Plan was swiftly approved by the U.S. Senate on February 4, 2021. Ninety of the 100 members voted in favor of the service industry-specific addition, which has been added to the larger ‘American Rescue Plan’.
The plan, based off of the RESTAURANTS Act which appeared last year, is a $25 billion grant program intended for restaurants and bars impacted by the effects of Covid-19.
Details of the provision are not yet confirmed, but grants would not need to be paid back, unless a venue closes. Should that happen, the grant would evolve into a low-interest loan. The Restaurant Rescue Plan, if passed, would only be applicable to venues with 20 locations or less. That is a lesson learned from 2020’s initial Paycheck Protection Program (PPP) scandal, in which large corporations used loopholes to access millions of dollars in grants and drained the available funds in less than two weeks.
What is the RESTAURANTS Act?
The RESTAURANTS Act was reintroduced in the Senate last week. Last year, it was approved by the U.S. House of Representatives, but never made it to the U.S. Senate because of political infighting. The name of the act stands for ‘Real Economic Support that Acknowledges Unique Restaurant Assistance Needed to Survive’, and it would provide $120 billion in relief to restaurants, bars and caterers who were affected by Covid-19 related shutdowns and restrictions. Restaurants could receive grants up to $10 million to cover eligible expenses over the last year.
To be eligible for relief under the RESTAURANTS Act, a business cannot be publicly traded or part of a chain with 20 or more venues with the same name. Businesses can only apply for one grant, and priority will be given to businesses owned by women and minorities. Additionally, for the first 14 days, the RESTAURANTS Act will only be open to applications from venues with $1.5 million annual revenue or less, to prevent larger businesses from wiping out allocated funds. This act was proposed by the Independent Restaurant Coalition.
What Happens Next?
Neither plan has been approved (yet). They still need to be voted on by both houses, and then signed off on by the president. The process, which can take years, is expected to be confirmed within the coming weeks. To support the Restaurant Rescue Plan or the RESTAURANTS Act, contact your representatives and urge them to push these initiatives through. Groups like the Independent Restaurant Coalition have been working closely with government officials to fight for restaurant-focused relief. Their website and social media pages have useful resources, including tips on how to effectively reach out to government representatives.