New York City restaurants have been hurt by the mandatory closings, reduced operating hours, and outdoor dining requirements imposed by New York State and New York City as a result of the virus.
Many restaurants have closed or filed for bankruptcy protection. However, for those that remain open or continue to operate, there may now be some relief thanks to the American Rescue Plan Act, which established the Restaurant Revitalization Fund to provide funding support to restaurants and other eligible businesses.
Awards are based on losses incurred as a consequence of the pandemic, calculated as the difference between 2019 and 2020 receipts, less other federal assistance.
Restaurants participating in this program can receive up to $10 million per business in compensation for pandemic-related revenue losses, up to a maximum of $5 million per physical location.
Recipients are not required to repay the funding as long as funds are used for eligible uses no later than March 11, 2023.
Who can apply for this relief? According to the SBA, eligible entities who have experienced pandemic-related revenue loss include:
Restaurants
Food stands, food trucks, food carts
Caterers
Bars, saloons, lounges, taverns
Snack and nonalcoholic beverage bars
Bakeries (onsite sales to the public comprise at least 33% of gross receipts)
Brewpubs, tasting rooms, taprooms (onsite sales to the public comprise at least 33% of gross receipts)
Breweries and/or microbreweries (onsite sales to the public comprise at least 33% of gross receipts)
Wineries and distilleries (onsite sales to the public comprise at least 33% of gross receipts)
Inns (onsite sales of food and beverage to the public comprise at least 33% of gross receipts)
Licensed facilities or premises of a beverage alcohol producer where the public may taste, sample, or purchase products
The above requirements and how to apply can be found at
https://www.sba.gov/funding-programs/loans/covid-19-relief-options/restaurant-revitalization-fund
For restaurants that remain open and want a second chance at business, the RTF can be a lifeline.
The program should reduce the number of restaurants that would have had to close or declare bankruptcy in the future.
In addition, this program may give restaurants leverage to renegotiate leases and/or good guy guarantees they previously granted to landlords.
The program probably will not help guarantors of leases who have closed and been sued by their landlord.
Jim Shenwick 212 541 6224 jshenwick@gmail.com
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