The Biden administration opened a new relief fund for restaurants. 186,200 applied in 2 days.

biden burgers
President Joe Biden.

  • A $28.6 billion program designed to help restaurants received over 186,000 in its first two days.
  • The Restaurant Revitalization Fund was established as part of the American Rescue Plan.
  • “Our restaurants need a seat at the table,” President Joe Biden said in an address.
  • See more stories on Insider’s business page.

A $28.6 billion restaurant aid program received 186,200 applications in its first two days, according to the White House.

Bars, restaurants, and other eligible businesses could start applying for the Restaurant Revitalization Fund (RRF) on May 3. The initiative is part of President Joe Biden’s $1.9 trillion American Rescue Plan, and provides grants of up to $10 million for businesses that lost revenue in 2020.

More than $9 billion of the program’s funds were set aside for businesses that made under $500,000 in 2019; those businesses represent 61,700 of applicants so far.

For its first 21 days, the program will prioritize applications from small businesses owned by women, veterans, and those who are “socially and economically disadvantaged.” According to the White House, 97,600 applications came from those groups.

In a Wednesday address, Biden said it looks like about 100,000 restaurants and other eligible businesses will be able to receive relief, and he wrote a similar statement on Twitter.

As Insider’s Jennifer Ortakales Dawkins reported, businesses will be able to use their funds on everything from rent to payroll to paid sick leave.

“Right now, only about a quarter of the restaurant owners expect to return to normal operations in the next six months. We can do much better than that with the American Rescue Plan,” Biden said.

As the economy has reopened, the ailing leisure, hospitality, and retail industries have seen employment rebound. A third of March’s surprisingly robust job additions – 916,000 nonfarm payroll jobs – were in those industries. Small businesses have also been increasingly opening up as vaccinations ramp up and restrictions lift in many areas.

However, small businesses in the service sector have seen a bleaker outlook: A new analysis from the New York Federal Reserve‘s Liberty Street Economics of about 100,000 such businesses found that 35% of businesses active prior to the pandemic remain closed. Just about 4% of workers laid off from those closed businesses will be rehired, according to the analysis, and likely only 3% of those businesses will actually reopen.

“We’re relying on restaurants to play a big role in our recovery,” Biden said. “We want our economy to recover in a way that deals everyone in and our restaurants need a seat at the table – no pun intended.”

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House passes bill to extend PPP small business aid for 2 months

Blaine Luetkemeyer
Rep. Blaine Luetkemeyer (R-MO).

  • The House voted to extend the Paycheck Protection Program through May 31.
  • The bill also allows the Small Business Administration to process loan applications through June 30.
  • The 415-3 bipartisan vote may ensure small businesses won’t experience a lapse in needed aid.
  • See more stories on Insider’s business page.

To continue providing aid to small businesses recovering from the pandemic, the House voted on Tuesday to extend the Paycheck Protection Program (PPP) by two months, ahead of its expiration on March 31.

The bill to extend the PPP had been introduced on March 11 by Small Business Committee Chair Nydia Velàzquez, Ranking Member Blaine Luetkemeyer, Rep. Carolyn Bourdeaux of Georgia, and Rep. Young Kim of California. Less than a week later, the House overwhelmingly voted by 415-3 to extend the program through May 31 to avoid a lapse of aid.

The program has provided small businesses with $700 billion of emergency loans to date, according to a press release.

“Based on recent economic data and the demand for PPP loans, it’s clear that small businesses still need support. We are making progress in our public health fight against this virus, but this pandemic continues to impact communities across the country, and we can’t let up on our efforts,” Velázquez said in a statement. “By providing small businesses with two more months to apply and giving the SBA [Small Business Administration] an additional month to process applications, we will help ensure critical support isn’t cut off.”

Under the bill, the SBA has until June 30 – a month after the PPP ends – to continue processing loan applications, giving small businesses the chance to continue receiving aid after the Program expires.

Since it was first established under the CARES Act in March, the PPP has encountered a host of issues with loan distribution. For example, although loans within the program are intended for businesses with 500 or fewer employees, the fast-food chain Shake Shack received a $10 million loan, which it later returned.

And recently, the Office of the Inspector General found that the PPP distributed more than one loan to over 4,000 borrowers due to flaws in the SBA’s controls.

However, despite the flaws, small businesses have not yet recovered from financial hits the pandemic brought on, emphasizing the need for a PPP extension. In President Joe Biden’s American Rescue Plan he signed on March 11, $50 billion was set aside for small businesses, including $7.25 billion specifically for the PPP.

The bill now heads to the Senate, where it may be passed before members leave Washington in mid-April.

“As America begins to open up for business and vaccines become more widely distributed across the country, we must provide targeted relief for small businesses that need it most,” Luetkemeyer said in a statement. “This bipartisan legislation provides a commonsense extension to the Paycheck Protection Program and the tools for Main Street USA to contribute to their local economies once again.”

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