On Monday May 24, the Small Business Administration (SBA) closed the portal offering relief under the Restaurant Revitalization Fund (RRF) signed into law in March. The numbers are staggering as the amount of relief requested by restaurant owners, far exceeded the supply of funds. The portal page now reads, “After an overwhelming response to the Restaurant Revitalization Fund, the application portal is now closed for new applications.”
The $28.6 billion authorized by Congress and signed into law was exceeded by a significant factor, though final numbers are still pending. What are restaurant owners to do now? Here are a few thoughts from We Sell Restaurants.
Restaurant Owners Waiting to See if they Receive Grants
Restaurant owners should first, hang in there and see if your application was funded. The site, available at this link, allows you to log in and check the status of your application. The SBA is still combing through the applications and to our knowledge, all applicants have not been advised about the status of their grant, prioritization candidates and otherwise.
Will you be funded? That is still to be determined. This is how the applications stacked up as of May 18 and these numbers would have climbed by the date they closed the portal.• 12,898 applications were received from restaurant owners with sales of less than $50,000 pre-pandemic. That turned into an ask of $290 million.
• 73,671 applications were received from restaurant owners doing sales between $50,000 and $500,000. That equaled to requests for more than $6.1 billion in funds.
• 34,010 applications were turned in from restaurant owners doing sales of between $500,000 and $1.5 million. That was an initial request for $8.4 billion funds.
The total count of applications received were more than 303,000. Since the SBA prioritized those applications that were from women owned, veteran owned and socially and economically disadvantaged groups, these equated to more than two thirds of the initial applications (207,000 of the 303,000 applications.)
• More than 122,000 women business owners.
• More than 14,000 veteran business owners.
• More than 71,000 economically and socially disadvantaged individuals.
There are already at least two lawsuits filed disputing the prioritization of funds for certain groups ahead of others. One suit in Tennessee was not successful, another plaintiff in Texas has prevailed. There will be more to come on how the courts address the prioritization question though there are no immediate answers on this point.
Restaurant Owners that Receive Grants
For restaurant owners that did receive funding, you will now need to be concerned about accurately reporting expenses. The National Restaurant Association and the American Institute of Certified Public Accountants have released a “Restaurant Revitalization Fund (RRF) Expense Tracker” available at this link from We Sell Restaurants. This helps restaurant owners that receive grants easily track and document use of the funds for specific categories.
Restaurant Owners that Did Not Receive Grants
If you did not receive grants, there may still be state and local programs to assist you. The best resource to track down these programs is through the National Restaurant Association or more importantly, for local issues, through your state restaurant association. Many of the state organization, like the Texas Restaurant Association, have been at the forefront of all relief programs for the industry. They have the latest information and tips for restaurant owners.
There are also still funds available in the EIDL (Economic Injury Disaster Loan) budget with the SBA. This is a loan, not a grant but the terms and interest rates are very desirable. The March 24 bill creating the RRF Act allowed for increases to the loan amounts for restaurant owners through the EIDL program. You can submit a request for an increase at this time.
The SBA is reaching out directly through email to notify restaurant owners so pay attention if you get an email from @sba.gov or @updates.sba.gov addresses or follow up online yourself at the SBA.gov. If a restaurant owner accepted a loan for less than the full amount originally offered, you now have up to two years after the date of the loan promissory note to request additional funds.
You can continue to request additional funds even after the application deadline of December 31, 2021. This is good news as these funds are low interest and readily available.
Restaurant owners that exhaust all efforts for funding may still have a valuable asset on their hands. There is a ready market for buyers fueled by the unemployed purchasing businesses and relocating families moving out of certain states in favor of those that are business friendly and eased restrictions earlier.
Contact We Sell Restaurants if you need an understanding of the value of your restaurant.