The Virginian-Pilot | May 08, 2021 at 10:26 AM Restaurant owner Kevin Ordonez at Alkaline Baby Izak
“Brain is fried,” wrote Eric Nelson, owner of Norfolk restaurant Crudo Nudo, on his Facebook page Monday afternoon. “The SBA grant application has been frozen for 2 hours.”
Like the owners of more than 200,000 food-service businesses this week, Nelson was applying to receive a grant from the $28.6 billion Restaurant Revitalization Fund, approved this year as part of the CARES Act.
Grant applications opened Monday. Until the fund is expended, restaurants can apply to receive money “equal to their pandemic-related revenue loss,” up to $10 million per business and $5 million per location, minus federal pandemic aid they’ve already received. Unlike Paycheck Protection Act loans, the Revitalization Fund is targeted specifically to restaurants and can be used to cover a broad array of expenses, including back rent.
Nelson said the application was pretty easy and intuitive until his application froze on the confirmation screen.
“The site locked up on me and I stressed out,” he said, though he was eventually able to get assistance to unfreeze his application.
Technological mishaps were relatively minimal, Small Business Administration head Isabella Casillas Guzman said Friday. Delays in processing, such as Nelson’s, were mostly attributed to a glitch with vendor DocuSign, which certifies electronic agreements.
“We actually were very pleased that we had a smooth technology rollout on day one,” Guzman said. “Especially considering the high demand that we had.”
In just the first two days of applications, the SBA received 186,200 applications from restaurants, bars, and other eligible businesses. State-specific numbers are not available.
Applications are processed on a first-come, first-served basis until the money runs out. For a priority period during the first 21 days, the only applications processed will be businesses that are 51% owned by women, veterans, and members of socially and economically disadvantaged groups such as racial and ethnic minorities. Priority applicants comprised 97,600 of the applications received in the first two days.
On Wednesday, President Joe Biden visited the first restaurant to be approved for priority grant funding, Taqueria Las Gemelas in Washington, D.C.
“Restaurants are more than a major driver in our economy. They’re woven in the fabric of our communities,” said Biden, who ordered a bag that included barbacoa and beef-tongue tacos. The taqueria commemorated the president’s order on its menu as the “Biden Bundle.”
Most restaurants will receive funds a bit more slowly than Las Gemelas — around 14 days after each application starts being processed.
To be eligible for priority applications, each business owner must self-attest as belonging to an eligible group, Guzman said, and are accountable if they misreport.
“Across all government programs, obviously, when you self-attest there’s stringent requirements around that,” she said. “So people need to be, of course, truthful and honest with that process.”
As a strong military region, Hampton Roads may stand to benefit more than others from applications by veteran-owned businesses. Among the nation’s 50 most populous cities, Virginia Beach had the highest proportion of veteran-owned firms in the country at 15.2%, according to a 2012 census survey of business owners.
After the priority period, the rest of the applications will be processed. The fund sets aside $9.5 billion for owners of smaller restaurants, including $500 million for the very smallest food businesses with annual revenues of less than $50,000. Grants given to small restaurants during the priority application period will also count toward that total, Guzman said.
The SBA conducted advance user testing and partnered with Square, Clover and other popular point-of-sale systems to make entering financial data easier for small restaurants that may lack access to lawyers and accountants, Guzman said.
Kevin Ordonez, owner of Alkaline and Baby Izakaya restaurants in Norfolk and Virginia Beach, said he’d tried applying for every pandemic grant possible with varying success. The Revitalization Fund application was “the least painful process of all of them so far,” he said. “Which makes sense, because maybe the SBA has been learning that the other applications were a complete nightmare.”
He, too, had to wait hours for DocuSign to verify his application on Monday, he said.
His Norfolk restaurant was down as much as 50% last year, Ordonez said, while the one in Virginia Beach was closed for much of the year. As Filipino-owned businesses, his restaurants qualified as priority applicants; Ordonez said he’s already watched his grant application proceed through about half the steps required for approval.
He doesn’t want to get too optimistic just yet but said the grants are of existential importance.
“If we get the SBA money… it could be a big contributing factor to whether the Beach restaurant survives or not,” he said. “Same goes for Norfolk.”
At Crudo Nudo, Nelson was told he’d potentially be eligible for a $61,000 grant. Even though he applied on the first day, he worries the money could be gone before his application can be processed. Nelson’s restaurant does not qualify for the priority application period.
“I am definitely wondering if there will be money after the 21 days,” he said. He hasn’t taken any income from his restaurant since the beginning of the pandemic, he said, and the money is pivotal to the survival of his business.
“That money will go to past due rent, bills, unpaid invoices and keeping the employees paid. … It’s going to help get us back on our feet,” he said.
Restaurant Revitalization Fund applications will be retained even if current funds run out, Guzman said. In the event that the program receives additional funding, existing applications will be processed in order of receipt. She encourages restaurants to continue to apply.
“If money runs out as we’re distributing funds, their place in line, in essence, is secure. So they should apply,” she said. “I can’t speak to whether Congress will appropriate more funds. But we know that the demand is there. There’s been a huge interest in this program, and restaurants are still suffering during this disaster.”
Matthew Korfhage, 757-446-2318, email@example.com