Dive Brief:
- New York will launch an $800 million COVID-19 Pandemic Small Business Recovery Grant Program Thursday that provides funding to small and micro businesses that have experienced a 25% year-over-year loss of gross receipts due to COVID-19 disruption. The grants can be used for a variety of expenses, including payroll, rent, utilities, PPE and other costs incurred between March 1, 2020 and April 1, 2021.
- Businesses can have no more than 100 employees and must have begun operating on or before March 1, 2019 to receive a grant. Businesses do not qualify if they have received money from the Restaurant Revitalization Fund, but are still eligible if they received loans of $100,000 or less through the Paycheck Protection Program.
- Grants offered are $5,000, $10,000 or 10% of gross receipts (maxing out at $50,000) depending on a business's annual gross receipts. This cash infusion could be especially helpful for New York City restaurants, which were hit hard by the city's stringent COVID-19 safety restrictions, while the industry awaits more federal aid.
Dive Insight:
New York's grant program comes a few weeks after the National Restaurant Association urged state and city leaders to establish localized grant programs to help fill the gap left behind by RRF and help restaurants recover. The fund could be refilled, however. On Thursday, sponsors of the Restaurants Act will introduce a new bill to infuse $60 billion into RRF, which closed last month after grant requests far exceeded its allotted $28.6 billion, the National Restaurant Association said in an email. Both pieces of grant news are likely welcome news for New York City restaurants, which may be especially needy after a hellish year of ever-changing dining restrictions.
At least 1,000 restaurants have closed in New York City as of March. That number could grow, however. The New York City Hospitality Alliance predicted earlier this year that up to one-third of the city's 25,000 restaurants could close permanently without government aid, for example.
These numbers don't even reflect the pandemic's impact on the entire state — which is home to the second highest number of restaurants in the country, behind California, according to data from the NRA. This $800 million round of funding is the latest in a long list of grants issued to kickstart recovery for New York's struggling operators. In January, the state launched a $3 million "Raising the Bar Recovery Fund" to offer a $5,000 grants to struggling full-service restaurants, a $25 million New York State Restaurant Resiliency Program to award grants to restaurants providing free meals to economically disadvantaged individuals and a $35 million Restaurant Return-To-Work Tax Credit. Last year, the state also issued a variety of grant programs for both restaurants and restaurant workers.
New York City is planning a full reopening on July 1, but that doesn't necessarily mean recovery is imminent. Most New York City's restaurants' revenue dropped by over 50% throughout the past year, and they remain down by more than 30% as of June 2021 compared to 2019, even as restrictions ease.
Further, on Google's list of cities where restaurant-related searches have recovered the slowest, New York City comes in third place, behind San Francisco and Washington, D.C. Until this needle moves more quickly and revenues turn positive, funding could be needed to keep restaurants afloat.
New York isn't the only market scrambling for more lifelines, however. California Gov. Gavin Newsom recently proposed an additional $1.5 billion in financial aid be given to restaurants and other small businesses in need. Oregon is also using part of its budget surplus to go toward small business grants.
