Restaurants, bars, and other small businesses offering on-site food and beverages are vital to our communities and economy. From big cities to small towns, these restaurants and bars offer communities a place to gather, celebrate, and share ideas. They also employed nearly 12 percent of all workers prior to the pandemic. Despite their importance, restaurants and bars have suffered severely during the pandemic.

The Biden-Harris Administration has made supporting small businesses – including small restaurants and bars – a top priority.

Established through the American Rescue Plan (ARP), the Biden-Harris Administration recently launched the Restaurant Revitalization Fund (RFF) – a $28.6 billion program to aid restaurants, bars, food trucks and other food and drink establishments. In the first two days of the program:

  • 186,200 restaurants, bars, and other eligible businesses in all 50 states, Washington, D.C., and five U.S. Territories applied for relief.
  • 97,600 applications came from restaurants, bars, and other eligible businesses owned and controlled by women (46,400), veterans (4,200), socially and economically disadvantaged individuals (30,800), or some combination of the three (16,200).
  • 61,700 applications came from businesses with under $500,000 in annual pre-pandemic revenue, representing some of the smallest restaurants and bars in America.

Under the RRF, restaurants and bars are eligible for grants equal to their pandemic-related revenue loss, with a cap of $10 million per business and $5 million per location. The funds are available for certain eligible uses, like payroll and rent.

While all small businesses are welcome to apply, under the law the SBA will prioritize funding applications from small businesses owned and controlled by women, veterans, and socially and economically disadvantaged individuals for the first 21 days of the program. Following the 21 days, all eligible applications will be funded on a first-come, first-served basis.

In addition to the 21-day priority period, the Biden-Harris Administration is taking steps to ensure the equitable distribution of relief by establishing $9.5 billion in set-asides for the smallest restaurants and bars – including millions of dollars for restaurants, bars, and food trucks with under $50,000 in revenue.

In addition to the RRF, in its first 100 days, the Administration approved $31 billion in Paycheck Protection Program (PPP) loans, $438 million in COVID-19 Economic Injury Disaster Loans (EIDL), and more than $29 million in Targeted EIDL Advance grants to restaurants and bars around the country. The Administration’s national vaccination strategy and direct relief for working families have also helped restaurants and bars re-open, re-hire, and return to normal operations. While the Administration remains focused on helping these restaurants and businesses make ends meet, data suggests that the overall outlook for the industry has improved in recent months:

  • The restaurant industry has added 450,000 jobs since January.
  • The share of restaurant and bar owners planning to hire in the next six months has nearly doubled, from just 30 percent in January to more than 57 percent in mid-April.
  • The share of restaurant and bar owners that have returned to normal operations has more than doubled since January and the share expecting to return to normal operations in the next six months has increased from just 17 percent to more than 26 percent.

Unfortunately, many restaurants and bars remain partially closed, with reduced revenue and significant pandemic-related debt. In the weeks ahead, the Administration will prioritize getting RRF relief to hard-hit businesses so they can keep their doors open.

American Restaurants and the COVID-19 Pandemic
Prior to the COVID-19 pandemic, the restaurant and bar industry was one of the fastest-growing sectors of the U.S. economy. From 2009 to 2019, the number of restaurants, bars, and other food and beverage places grew by 19 percent, from 548,000 establishments to 654,000 establishments. Over the same period, employment grew by 28 percent (or 2.7 million jobs), from 9.4 million to 12 million employees. And, the industry’s annual retail sales grew by 70 percent, from $453 billion to $774 billion. In 2019, this industry represented 2.3 percent of U.S. GDP.

The restaurant industry has suffered disproportionately during the pandemic. Nearly half of all restaurant, bar, and other food and drinking place workers (6 million people) lost or left their jobs between February and April 2020. While employment rebounded as pandemic-related shutdowns and restrictions eased, the industry was still down 2.3 million jobs at the end of 2020. The industry added another 450,000 jobs between January and March 2021, but remains down 1.8 million jobs compared to February 2020. Consistent with the decline in employment, monthly retail sales at restaurants, bars, and other food and drinking businesses fell by more than half in the early months of the pandemic, from $66 billion in February 2020 to $30 billion in April 2020. The industry ended the year with $623 billion in retail sales, 19 percent lower than 2019. While the true number of restaurants and bars permanently lost during the pandemic may not be known for some time, research suggests that more than 400,000 small businesses across industries have permanently closed and millions more are struggling to make ends meet.

The Biden-Harris Administration’s Recent Efforts to Support Restaurants and Bars
In just 100 days, the Small Business Administration (SBA) delivered more than $31 billion in relief to restaurants and bars. Specifically, the SBA has:

  • Approved more than 337,000 forgivable loans worth $31 billion to small restaurants and bars through the Paycheck Protection Program. PPP has served as a lifeline to millions of businesses that struggled to remain open during the pandemic. By implementing a series of program and policy changes to improve access for sole proprietors, open up the program business owners with delinquent student loan debt prior non-fraud felonies, and engage in focused outreach and education targeting the smallest businesses, the 2021 round of PPP has also seen real improvements in equity of outcomes. Across industries, 95% of PPP loans have gone to businesses with less than 20 employees while the share of PPP funds going to rural businesses has increased by 20 percent from the 2020 program round. Additionally, the average loan size in 2021 is roughly $45,700, down by more than half from an average size of $101,000 in 2020.
  • Approved more than 4,000 long-term, low-interest loans worth $438 million to small restaurants and bars through the COVID-19 EIDL program. The COVID EIDL program has enabled millions of small businesses – including small restaurants and bars –to meet financial obligations and operating expenses in the wake of the pandemic. In 2021, the Biden-Harris Administration took steps to increase the amount of support available through the COVID EIDL program by raising the loan limit to 24-months of economic injury with a maximum loan amount of $500,000. This summer, SBA will further increase the cap on COVID EIDL loans up to $2 million, which is the maximum allowed by statute. These changes will unlock billions of dollars in additional funding to restaurants and bars who previously received the maximum loan amount.
  • Approved $29 million in flexible Targeted EIDL Advance grants to more than 4,000 hard-hit small restaurants and bars in low-income communities. The COVID-19 Targeted EIDL Advance program provides advance funds of up to $10,000 to small businesses – including small restaurants and bars – that are located in low-income communities, and have suffered revenue losses of more than 30 percent. President Biden’s American Rescue Plan included an additional $5 billion for the Supplemental Targeted EIDL Advance Program, which will offer grants to the smallest, hardest-hit businesses in America, including many including restaurants and bars.

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