The federal government is preparing to open two new industry-specific aid programs for small businesses, one of which has been in the works for months as the signing of the pandemic aid, the Paycheck Protection Program, is nearing its end.
The Small Business Administration hopes to apply for a $ 16 billion grant fund by the end of this week for live event businesses such as theaters and music clubs. The program, called the Shuttered Venue Operators Grant, was slated to begin nearly two weeks ago, but its application system failed and collapsed, hampering thousands of desperate companies that had waited months for the promised help.
On Saturday, the agency released more details on its upcoming Restaurant Revitalization Fund, a $ 28.6 billion support program for bars, restaurants and food trucks whose sales have been devastated by the forced shutdowns states imposed in response to the pandemic . The fund was created last month as part of the $ 1.9 trillion economic support package. A seven-day trial will begin within the next two weeks to help the agency avoid the technical fiasco that plagued the event program.
The agency has not announced a specific start date for either of the two funding programs.
“Help is here,” said Isabella Casillas Guzman, the agency’s administrator, of the restaurant program. “We’re rolling out this program to ensure these companies meet payroll, buy supplies, and get what they need to transition to today’s Covid-restricted market.”
Both programs offer recipients up to $ 10 million in grants to compensate for a portion of their lost sales. However, it is expected that both programs, where the money is distributed based on prioritization rules based on availability, will run out of money quickly. In particular, the money in the restaurant fund is lagging far behind its needs, agency officials have recognized.
“Everyone should apply on day one,” Patrick Kelley, director of the agency’s Office of Capital Access, told attendees in a webinar organized last week by the Independent Restaurant Coalition. Lawmakers predicted demand of at least $ 120 billion for the restaurant fund, Kelley said, but provided less than a quarter of that amount.
The Restaurant Fund Law provided an exclusive 21-day period for businesses that are majority-owned by women, veterans, or socially disadvantaged people. The SBA said the group includes those who are black and Hispanic, as well as Native Americans, Americans from the Asia-Pacific region, and Americans from South Asia.
That time alone will almost certainly run out of restaurant funds. Applicants are asked to self-certify their eligibility for the priority period, according to the Small Business Administration.
Participants in the fund’s seven-day pilot phase will be randomly selected from among current paycheck protection program borrowers who meet the criteria for the priority period, the agency said. You will help test the system, but will not receive grants until the application system is opened to the public.
The SBA has released few details about the technical breakdown that destroyed its application system for the Live Events Grant program. On the day it was supposed to open, frustrated applicants spent more than four hours reloading a broken site before the agency closed it. No applications were accepted.
“After our vendors had fixed the main cause of the initial technical problems, more in-depth risk analysis and stress tests identified other problems that affect application performance,” said Andrea Roebker, spokeswoman for the agency, on Friday. “The providers address and mitigate them quickly and work tirelessly with our team so that the application portal can be reopened as quickly as possible and we can provide this important help.”
A spokeswoman for Salesforce.com, whose technology supports the system, said the company “worked with SBA to resolve initial technical issues and we are continuing to work together to improve website performance.”
The restaurant fund is managed by a different part of the agency and uses a different technology system than the closed events program. After waiting nearly four months for this program to start, industrial companies can’t hold out much longer, said Audrey Fix Schaefer, a spokeswoman for the National Independent Venue Association, a trade group.
“Landlords can’t last forever. Eviction notices come. People say, “We can’t do this anymore,” she said.
The Paycheck Protection Program, launched just weeks after the pandemic broke out, extended $ 762 billion in unsuccessful loans to millions of businesses last year.
It is slated to end by May 31, but it seems likely that its funding will run out before then. According to an SBA spokesman, the program had $ 44 billion left by mid-week.
