Billions in federal funding dedicated to small businesses, restaurants
FORT SCOTT, Kan. – From state lockdowns to local restrictions, restaurants and small businesses have been hit perhaps the hardest by the pandemic.
At Holmtown Pub in Fort Scott, things are starting to get back to normal, but it’s still not quite the same.
“We’re not to where we were this time last year, but we’re making headway,” says owner Kristy Holmes.
In 2020, the pub lost around 25 percent of their normal revenue. To stay open, Homles had to put in the work to apply for several different grants, including for the Paycheck Protection Program on two separate occasions.
“When business was slow, we were able to make payroll. We used some of it for utilities, or to make loan payments on the building,” says Holmes.
“In the first round we assisted 68 businesses to the tune of about 1.6 million dollars. With the second round, we’ve assisted 87 businesses for just over a million dollars,” explains Katie Casper at Union State Bank.
The Paycheck Protection Program was created with the passage of the CARES Act in 2020. In a nutshell, it’s a program that allows businesses to get loans to cover the cost of their payroll, with the loans being forgivable if the funds were used for their intended purpose — retaining or rehiring workers.
Small businesses specifically had to apply through their bank, such as Union State Bank, to get the loans.
The $349 billion originally allocated to the program with the passage of the CARES Act ran dry within two weeks. The Associated Press found that at least 94 companies that disclosed receiving aid were publicly traded, some with market values well over $100 million. In December 2019, $284 billion was added to the Paycheck Protection Program with the passage of the second COVID-19 relief package. Now, after the passage of the American Rescue Plan Act, an additional $7.25 billion is being added to the Paycheck Protection Program. But, the current March 31st end date for the program is still in effect. Legislation has been introduced to extend the deadline by two months, to May 31st, according to reporting by CBS News.
“I think it’ll continue to have an impact, because there are those businesses out there that just don’t know about it. And the stimulus packages, as they’ve been passed, keep gaining steam,” says Casper.
But additional funding for the Paycheck Protection Program is far from the only funding designated for businesses still struggling to get back on their feet. The American Rescue Plan Act also created the Restaurant Revitalization Fund, the first stimulus program created specifically for restaurants.
“We’ve had some wins along the way. We’ve gotten things like PPP. But our goal has always been an industry specific solution. And the passage of the Restaurant Revitalization Fund is a big step toward that,” says Sean Kennedy, Executive Vice President of Public Affairs at the National Restaurant Association.
$28.6 billion dollars is being dedicated to the program, which will provide grants to restaurants that are equal to the amounts of its pandemic related revenue loss. Something that could be a good thing for the industry, since according to the National Restaurant Association 110 thousand businesses have closed since the onset of the pandemic.
Unlike the PPP program, restaurant owners will have to apply for grants directly through the Small Business Administration. The application process is not available yet, because the SBA is still in the process of creating it.
“It includes bars, it includes taverns, it includes food trucks, it includes restaurants of every shape and size beyond that,” explains Kennedy. “We’re hoping that this money’s gonna go out quickly, but we’re still waiting for… there’s a lot of things the SBA needs to do.”
In Holmes’ case, the amount she could qualify for may be lower since she received two PPP loans, but she plans to apply once the process starts.
“Things are just so tough on small businesses right now,” says Holmes. “People are still scared. They’re not getting out like they were before. They’re starting to come back, but we have a long way to go.”
The U.S. Chamber of Commerce hosted a webinar on Friday that explains a lot of the programs for businesses included in the American Rescue Plan Act.