Restaurants, bars, caterers and other food businesses devastated by the pandemic began applying Monday for help from a new $28.6 billion federal aid program, but the money isn’t expected to last long.
Despite a few glitches after thousands descended on the application website for the Restaurant Revitalization Fund when it went live at noon, the process was fairly straightforward, applicants said.
That was a welcome change from the technical problems that have plagued other aid programs run by the Small Business Administration, which is managing the restaurant fund.
“It was impressively smooth,” said Sarah Horak, who co-owns three bars and restaurants in Grand Forks, N.D. She was able to submit her first application just 10 minutes after she logged on to the website.
Congress created the restaurant fund as part of the $1.9 trillion relief bill passed in March. For the first 21 days, the Small Business Administration will approve claims exclusively from businesses that are majority-owned by people who fall into one of the priority groups designated by legislators: women, veterans and individuals who qualify as both socially and economically disadvantaged.
That latter group includes those who meet certain income and asset limits and are Black, Hispanic, Native American, Asian-Pacific American or South Asian American, the agency said.
Applicants from those groups will be asked to certify their own eligibility for the exclusivity period. That three-week priority period alone is likely to exhaust the fund.
The money allocated by Congress “is probably not going to be enough funds, in all likelihood, for the demand that’s out there,” Patrick Kelley, who runs the S.B.A.’s Capital Access office, acknowledged on a webinar last week. He said he hoped Congress would provide more money as needed.
The fund offers grants of up to $10 million. The amount each business can receive equals the difference between its 2019 and 2020 gross receipts, minus certain other federal assistance such as loans from the Paycheck Protection Program.
Ms. Horak racked up more than $300,000 in debt last year to keep her restaurants afloat. She is hoping to use the grant money to pay off those loans and hire additional staff as customers return to her newly reopened businesses.
May 3, 2021, 8:53 p.m. ET
“We are seeing some positive trends in traffic, but it’s still not anywhere near normal,” she said.
Applicants who aren’t eligible during the priority period are waiting nervously to see if anything will be left for them. Jeremy Yoder and his wife, Barbie Yoder, opened the Alaska Crepe Co., in Ketchikan, Alaska, in 2019. He applied Monday for a grant.
“We’ve had to learn to run really lean this past year,” Mr. Yoder said. The Yoders’ business depends heavily on cruise visitors, and this year — like last year — could be a near-total loss on the tourism front.
Mr. Yoder took a full-time tech industry job last year to support his family and business. “We’re making enough to keep the doors open, but we’re certainly not profitable,” he said. “We’re losing money every day we’re open.”
Tamra Patterson, the owner of Chef Tam’s Underground Cafe in Memphis, was still trying to complete her application late on Monday afternoon. She made it through several steps but then got a message saying her responses had failed the agency’s “knowledge based authentication” check.
The S.B.A. said in a Twitter post that it was having trouble with that portion of the application process. “Your place in line is reserved and you will be able to complete your application shortly,” it informed those experiencing problems.
Ms. Patterson, who is Black, said she had not been approved for any other federal aid programs, including the Paycheck Protection Program. “Every time I tried to apply I ran into some type of hiccup,” she said.
Ms. Patterson’s restaurant had sales of more than $1 million in 2019, she said. Right before the pandemic, she moved her once-tiny business to a much larger, 7,000-square foot space and expanded her staff to 38 employees.
She had to lay off nearly all of them after the pandemic took hold. Takeout and delivery brought in some revenue, but her sales last year were down by at least 80 percent, she said.
Ms. Patterson is hoping the grant will buy her business some breathing room. She wants to give her 11 workers — who have been running “nonstop,” she said — some time off and to catch up on bills, like the payments she owes to her food vendors and other creditors.
“Just being able to pay my rent in full and on time would be amazing,” she said.
The Small Business Administration said its goal was to respond to applicants within 14 days. An S.B.A. spokesman declined to comment on Monday afternoon about how many applications had been received.
This is the second grant program the agency has launched recently. Last week, it began taking applications for the Shuttered Venue Operators Grant, a $16 billion relief fund for theaters, music clubs and other live event businesses. Nearly 9,500 businesses applied for that relief on the program’s first day, but the agency has not yet issued any grant decisions.