As federal funds become available for restaurants and other food and beverage service focused businesses, U.S. Rep. Anna Eshoo held a virtual town hall Thursday to field questions from small business owners eager to propel their shops through the pandemic.
“I want you to be able to access this money to cover your losses due to COVID so that you can really get on your feet and back into full swing on your businesses,” Eshoo, D-Palo Alto, said.
The webinar aimed to inform local merchants about upcoming grant opportunities from the $29 billion Restaurant Revitalization Fund established through the $1.9 trillion American Rescue Plan. Establishments with 20 or fewer locations will qualify for the grants and are required to serve patrons directly as at least a small portion of the business model.
Program grant sizes will be determined based on the difference between a business’ gross revenue from 2019 and 2020. The Small Business Association will determine another formula for determining grant sizes for businesses that did not file taxes for 2019.
Maximum grant size for a single business is $5 million and up to $10 million for those with multiple locations. Nonprofits, publicly traded companies and permanently closed businesses do not qualify for the program but businesses without a brick-and-mortar location, including food trucks and food stands, do.
Grants will also be nontaxable by the federal government, noted Eshoo. Julie Clowes, director of the Small Business Administration for Northern California, said California leadership is still discussing whether the grants will be considered taxable income though she suggested they may align with federal guidelines.
“This is to help people, not to place another burden on them with a surprise bill of taxes owed on monies that were either borrowed or granted,” Eshoo said.
Clowes told webinar participants that paycheck protection loans will be deducted from grants unless the loans were in the forgiveness process. Grants can also be used for any business related expenses, she noted.
Larry Chu, a small business owner who participated in Thursday’s webinar, highlighted the struggles faced by merchants during the pandemic and questioned whether application information would be made available before the portal opens.
“This last year has been very frightening, nerve racking, stressful and anything that kind of shines a ray of sunshine is a ray of hope but we’re still nervous,” Chu said. “Whenever these things come available you get nervous and start to feel it’s a race for time.”
An early priority period will open grants to women, veterans and socially or economically disadvantaged business owners. Priority applicants must have at least 51% ownership of the company and have daily business management control over the business. Businesses with multiple owners who fit the priority list and collectively meet criteria can also qualify.
Additionally, a portion of the $28.6 billion will be carved out for small business owners earning less than $500,000 in 2019. Clowes noted the Small Business Association also has the authority to create other priority periods or carveouts.
Clowes said additional information as to what documentation will be required could be released as early as next week, potentially followed by the portal opening. She noted interested applicants would be given a few days to review the documentation requirements before the portal opens and encouraged participants to frequently check the Small Business Association website.
Eshoo also encouraged participants to prepare for the portal opening to ensure as many local businesses receive grants as possible.
“Our restaurants are really our cultural touchstones in our community,” Eshoo said. “We take our families there. We know the owners. They know us by our first names. We see our friends and our neighbors and so you’re so important to all of us.”
Visit sba.gov/funding-programs/loans/covid-19-relief-options for more information on grant options.
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