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Here’s how the coronavirus stimulus plan will help Philadelphia restaurants

The $28.6 billion pot isn't just for restaurants, but for caterers and food carts, tasting rooms, taprooms, and more.

Eyob Moges prepares to set tables and chairs outside the Buna Cafe along the 5100 block of Baltimore Avenue in West Philadelphia on Thursday, Nov. 19, 2020. The restaurant is new and opened during the pandemic.
Eyob Moges prepares to set tables and chairs outside the Buna Cafe along the 5100 block of Baltimore Avenue in West Philadelphia on Thursday, Nov. 19, 2020. The restaurant is new and opened during the pandemic.Read moreYONG KIM / Staff Photographer

As the weather warms and service industry workers get vaccinated, another piece of good news is on the horizon for restaurants: The $1.9 trillion American Rescue Plan has earmarked $28.6 billion for eating and drinking establishments of all kinds, from food trucks and halal carts to airport bars and brewpubs.

The billions will be distributed as grants in amounts up to $5 million for individual restaurants, or $10 million for those with multiple locations. Restaurants with more than 20 locations will be excluded from consideration, even if they’re franchises, as will publicly traded companies. That means no Ruth’s Chris debacles this time around.

Grant amounts will be determined based on the difference between 2019 and 2020 sales (or other calculations, if not applicable). Of that, $5 billion will be reserved for businesses that saw less than $500,000 in revenue in 2019. The Small Business Administration’s administrator, who will oversee the grants, will factor in any other relief applicants have received during the pandemic. For the first three weeks of the application window, the administrator will prioritize women- and veteran-owned establishments, as well as “socially and economically disadvantaged” small businesses.

The $28 billion pot is a fraction of the $120 billion stabilization fund that the Independent Restaurant Coalition had proposed last spring — approved by the U.S. House last October as the RESTAURANTS Act — but IRC committee member Tyler Akin said “it’s a huge development.”

» READ MORE: Restaurant owners are forecasting massive closures. What would they need to survive?

“The mechanics of the program are basically identical to what was proposed in the RESTAURANTS Act,” he added. Akin owns Stock Fishtown and Rittenhouse and is chef-partner at Le Cavalier, in Wilmington’s Hotel Du Pont.

The American Rescue Plan grants will be far more flexible than Paycheck Protection Program funds, which initially had strict terms for loan forgiveness that were later relaxed. Funds can be put toward expenses like payroll, rent, maintenance, food costs, and utilities, but owners can also apply them to expenses incurred by constructing outdoor seating, acquiring PPE, or covering paid sick leave. The funds can cover expenditures between Feb. 15, 2020, and Dec. 31, 2021 (or later, if pandemic restrictions should extend).

“On the one hand, [the program is] backward-looking in its metrics and its allowance for certain types of spending. But I think a lot of folks are treating it as a forward-looking opportunity as well, to shore up their business and hopefully create a more durable model moving forward,” Akin said. “Even with the vaccination rolling out and the weather turning, it’s still a very, very challenging environment.”

Restaurants and restaurant workers stand to gain in some other ways from the new legislation. The $1,400 stimulus checks may give some homes disposable income to spend on dinners out. And the $300-a-week unemployment benefits are critical for many: “There are just so many scenarios that preclude so many people from coming back to work,” Akin said, citing child care, a lack of access to in-person learning, compromised immune systems, and close contact elderly family members who may not be able to be vaccinated.

» READ MORE: A business owner’s guide to Pa.’s next wave of COVID-19 relief grants

After President Joe Biden signs the bill, the IRC’s next step is reaching out to businesses to let them know about this opportunity — particularly smaller businesses that may be too thinly spread to notice or those run by non-English speakers. There are plans to translate application materials into several other languages and to provide attorneys and accountants to help facilitate the process for those who need assistance. The federal government will do outreach as well.

“A big part of what IRC and our congressional champions hoped to achieve with the bill was making sure it didn’t resemble a boondoggle for the largest concerns,” Akin said, “and to actually cordon off some of those funds for our smallest and most vulnerable allies in the restaurant community.”