The federal government funneled $28.6 billion into the fund to help struggling businesses in the restaurant industry recover from pandemic-related losses. Grants are capped at $10 million per business and $5 million per location.
During the first week, the Small Business Administration (SBA) approved 16,000 applicants. Over $2 billion in the first wave of funding started showing up in business bank account earlier this week. That’s an amazingly fast response.
All of those businesses are either owned by women, veterans and individuals who are socially and economically disadvantaged. That’s because when the fund was created, a 21-day priority period was created to process applications from those business owners.
After the 21-day period, any restaurant owner is eligible for a grant.
That was a noble aim, as those types of businesses are usually already surviving on slim profit margins, and are affected most by severe economic downturns.
The problem is there may not by any money left in the fund after the three weeks is up. Here’s an excerpt from an SBA press release this week announcing the approval of the 16,000 applications:
“Following the 21-day priority period, established by law in the American Rescue Plan Act, all eligible applications will be funded in the order in which they have been received,” it read. “While the SBA will continue accepting applications from any eligible establishment until funds are exhausted, the number of applications received so far could exhaust the funds authorized to fund the RRF.”
That means if you haven’t already applied for a grant, you are probably out of luck. And even if you have already applied for a grant, if you didn’t do it right away, the money could be gone by the time your number is called, especially if you don’t fall into one of the priority groups.
The RRF was a great first step, but it’s clear now it can only be a first step. While $28.6 billion is a lot of money, more is going to have to be done to help the restaurant industry recover from a year of disruptions and capacity limits.