In March, Eater LA wrote about the second round of assistance for restaurants and residents from the city, state, and federal level, designed to help restaurants, bars, clubs, street vendors, and venues, as well as their employees. Now, more state-based options for financial recovery aid for struggling businesses have arrived, with some relief programs re-upping on the assistance offered in 2020 with more grants and a longer application period for federal PPP loans.
Here’s a breakdown of what’s out there now, and where to find more information.
On March 30, President Joe Biden’s administration and Congress signed the PPP Extension Act of 2021, pushing the loan program’s application deadline to May 31. PPP loans, which some restaurants acquired in 2020, are still available, though the funds are depleting quickly, according to the federally-run Small Business Administration, which administers PPP. In 2020, restaurant owners and operators voiced concerns when the first round of loans that ran out of money before small operators could access funds. The second round can be used to help fund payroll costs, benefits, mortgage interest, rent, utilities, worker protection costs during the pandemic, as well as damage or vandalism incurred in 2020.
According to the SBA, restaurants are eligible for the second round if:
- Restaurants received a 2020 PPP loan and used the full amount only for authorized uses
- Has no more than 300 employees
- Can demonstrate at least a 25 percent reduction in gross receipts between comparable quarters in 2019 and 2020
These PPP loans have a low one percent interest rate and defers loan payments for six months. Eligible PPP loans can be forgiven full within the eight to 24 week period following the loan disbursement:
- Employee and compensation levels are maintained in the same manner as required for the first PPP loan (if applicable)
- The loan is spent on payroll costs and other eligible expenses
- At least 60 percent of the loan proceeds are spent on payroll costs
Last week in the Golden State, the California Restaurant Foundation also announced it will release $1.25 million in restaurant funds in the form of grants. The CRF’s Restaurants Care Resilience Fund includes up to $3,500 for restaurants in Los Angeles County, with priority given to businesses owned by women and/or Blacks, Latinos, Indigenous, and Asians.
The Restaurants Care Resilience Fund is also separately available for restaurants in California’s largest counties including Los Angeles, San Francisco, Sacramento, Alameda, Fresno, Kern, San Joaquin, and San Diego Counties. Eligible restaurants must have 50 or less employees and a minimum 20 percent revenue loss from 2019 to 2020. The grant — funded by organizations like SoCalGas and PG&E — can be used for payroll and operational expenses to allow operators to focus on rent or upgrades to outdoor dining. The grant award also comes with support services and resources, and applications will be available online from April 11 to 18.
One formal note: It is crucial to file and utilize any assistance within the requirements of the loan or grant. Using funds for unauthorized purposes is almost certainly illegal and could bring criminal charges. The PPP funds specifically are designed to help with the losses felt from the coronavirus pandemic, and hopefully make a difference for struggling businesses throughout the state and beyond.