On May 3, the Restaurant Revitalization Fund opened its virtual doors with a mission of giving out $28.6 billion in grants to one of the areas of the economy hit hardest by the pandemic.
President Biden even made a trip to a Washington, DC, restaurant on Thursday to highlight the program. He got tacos and enchiladas from Taqueria Las Gemelas, owned in part by Mexican immigrants.
The American Rescue Plan – signed into law in March – created the program, which offers restaurants and bars economic aid (grants, not loans) equal to their pandemic-related revenue loss, with a cap of $10 million per business and $5 million per location.
It is “so needed right now, especially with this sector,” said Isabella Guzman who oversees the program as Biden’s pick to head the Small Business Administration. The interview was part of Yahoo Finance's “All Markets Summit+: Small Business Recovery.”
And on Wednesday, Guzman announced some initial results on demand for the fund. In the first two days of applications following the program launch on Monday, the SBA says it received more than 186,000 applications from all 50 states and the District of Columbia.
The question facing the restaurants and bars rushing to get in their application is how long the money – meant to be used for payroll, rent and any other expenses – will last.
‘Prioritization has been really key’
For the first 21 days of the program, the SBA says it's prioritizing applications from small businesses owned and controlled by either women, veterans, or socially and economically disadvantaged individuals.
In her data release, Guzman highlighted that a majority of the first round of applications (97,600) came from businesses owned by members of these groups.
"That prioritization has been really key, as well as prioritizing small businesses with $9.5 billion of the $28.6 set aside for smaller entities," Guzman said.
The move is clearly an attempt to avoid some of the missteps early in the Paycheck Protection Program, the broader program of aid to all small businesses that is now largely out of money and set to stop accepting new applications at the end of the month.
In 2020, when the program launched, many businesses reported being shut out of the first waves of funding when hundreds of billions of dollars were allocated within days and better connected businesses – that had previous relationships with bigger banks – were able to get approved before other businesses had had their applications considered.
After the initial three-week window of the Restaurant Revitalization Fund, applications will be "funded on a first-come, first-served basis." The SBA is telling applicants to expect an average wait of 14 days for applications to process before funds are distributed.
The question for the weeks ahead is whether all businesses that need it will be considered now or at the end of the three-week window or in the months ahead.
"The funds availability is critical," said Guzman. "With the $28.6 billion, we anticipate high demand and so that is something that we're tracking on an ongoing basis."
Ben Werschkul is a writer and producer for Yahoo Finance in Washington, DC.