Image via California Restaurant Foundation

The Small Business Administration announced it will soon be getting relief funds out to the industry many considered the most impacted by Covid — restaurants. But as restaurant owners wait for the application process to open up, some fear the money will run out before restaurants get their relief.

The American Rescue Plan Act allocated nearly $10 billion to be distributed to restaurants whose incomes were affected by mandated stay-at-home orders. Money to restaurants would be distributed throughout the SBA equal to the amount of the revenue loss — minus any money received from the two rounds of Paycheck Protection Program — up to $10 million per business with no more than $5 million per location. As long as money goes toward eligible uses, business owners are not required to repay that money.

Money will first be directed to women-owned and veteran-owned businesses as well as those socially disadvantaged business owners.

Applications are not available yet, but today the SBA announced a partnership with point-of-sale providers, which will help process applications. Point-of-sale software helps restaurants process payments. Those companies included in the announcement are Clover, NCR Corporation, Square and Toast. 

Sample applications with the SBA are 16 pages long. Using a point-of-sale application could make the process more streamlined.

“The restaurant industry has been hit hard by the pandemic, and we are pleased to work with the SBA to help our customers easily access and navigate the Restaurant Revitalization Fund application process,” said Nick DeLeonardis SVP & GM, Payments, Lending, and Payroll at Toast in a press release.

But restaurants are already closing. The California Restaurant Association reports that up to 110,000 restaurants have closed since March 2020, roughly one-in-six.

Initial rounds of PPP were distributed through banks and this is the first time the SBA has had to handle direct applications, said Chuck Van Fleet, president of the Fresno Chapter of the California Restaurant Association. The funding, though delayed, especially helps as restaurant owners face higher payroll costs, including higher wages to get people back to work as well as state laws such as SB 95 requiring businesses to provide new supplemental paid sick leave to workers.

“Everything that keeps getting passed is insurmountable,” Van Fleet said. Van Fleet should be eligible for around $500,000 for his restaurant, Vino Grille & Spirits in north Fresno. But with $400,000 he received in PPP loans, he would only qualify for $100,000. He doesn’t expect he would qualify for money unless a second round of funding is made available.

“I think the money is going to run through very quickly,” said Lorraine Salazar, owner of Sal’s Mexican Restaurants in Selma, Fresno and Madera. 

The National Restaurant Association and restaurateurs have pressed the federal government to fund additional money to the program, Salazar said.

Operating through a point-of-sale system helps, said Salazar, as long as restaurants have one, which many don’t. Applications can be complicated and business owners may have have to turn to their accountants. There are resources available for small businesses as small business development centers, said Salazar.

But for those who didn’t get a first or a second round of PPP money, it will really help, said Salazar.