BusinessCBSN ChicagoChicago BarsChicago RestaurantsFederal FundingLocalMom's PlaceRestaurant Revitalization FundRon ProkaskiSeen on CBS 2Small Business AdministrationSyndicated LocalSyndicationTara MolinaWatch + Listen

Bars, Restaurants Hopeful That Federal Restaurant Revitalization Fund Will Be Game-Changer As They Submit Applications – trendat

CHICAGO (CBS) — We have seen bars and restaurants across Chicago close their doors over the past year, not able to stay afloat through the pandemic.

After a year of shutdowns, they are still restricted. On Monday, many were hoping a multibillion-dollar lifeline from the federal government will help those still barely hanging on.

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And as CBS 2’s Tara Molina reported, restaurants have been waiting a while for this help. They have waited months for the federal grant money, meant to replace what they have lost in the past year.

The owner of one River North bar and restaurant prepped for their application for more than a week, and said he believes it is going to be a game-changer.

The Restaurant Revitalization Fund will hand out a total of $28.6 billion. It is the cash infusion for which restaurants across the country have been waiting all this time.

“It’s going to be the difference, for sure,” said Ron Prokaski, owner of Mom’s Place restaurant and bar at 650 N. Dearborn St. “Thankfully, it worked out.”

We talked to Prokaski right after he finished his application through the Small Business Administration’s portal.

“This will save whoever is hanging on by a thread right now,” he said.

Mom’s Place scraped by for most of 2020.

“It’s been tough on everyone working here,” Prokaski said.

With changing restrictions and two indoor shutdowns, he said they were closed completely for about five months.

“The bills keep coming,” Prokaski said. “You have to keep the place heated; pay the rent – those things.”

Mom’s Place is Prokaski’s only restaurant, but restaurants with up to 20 locations can apply for the help.

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The maximum one restaurant can get is $5 million, with an applicant limited to $10 million total.

Publicly traded companies, and any restaurants that have already closed, are not eligible.

Applications from restaurants that are majority-owned by women, veterans and “socially and economically disadvantaged” applicants will be prioritized at the start.

As the SBA explained in a statement:

“For the first 21 days the SBA will accept applications from all eligible entities. But SBA will only process and fund priority group applications. Here is information on the priority groups. Days 22 through the program funds exhaustion, SBA will process applications in the order in which they are approved by the SBA.

“The SBA will take approximately 14 days to review and validate completed documentation.”

Hence, there is a big lingering question about this fund – is $28.6 billion enough, with the National Restaurant Association estimating a $270 billion hit to the industry since the start of the pandemic?

Prokaski said that is why restaurant owners across Chicago raced to the SBA website to apply as soon as the process opened up on Monday.

“It adds up quickly and the money is going to just evaporate,” Prokaski said.

According to the SBA, the following categories of businesses can apply for help from the Restaurant Revitalization Fund.

  • Restaurants
  • Food stands, food trucks, food carts
  • Caterers
  • Bars, saloons, lounges, taverns
  • Snack and nonalcoholic beverage bars
  • Bakeries (onsite sales to the public comprise at least 33% of gross receipts)
  • Brewpubs, tasting rooms, taprooms (onsite sales to the public comprise at least 33% of gross receipts)
  • Breweries and/or microbreweries (onsite sales to the public comprise at least 33% of gross receipts)
  • Wineries and distilleries (onsite sales to the public comprise at least 33% of gross receipts)
  • Inns (onsite sales of food and beverage to the public comprise at least 33% of gross receipts)
  • Licensed facilities or premises of a beverage alcohol producer where the public may taste, sample, or purchase products

The SBA said the funds may be used for the following specific expenses:

  • Business payroll costs (including sick leave)
  • Payments on any business mortgage obligation
  • Business rent payments (note: this does not include prepayment of rent)
  • Business debt service (both principal and interest; note: this does not include any prepayment of principal or interest)
  • Business utility payments
  • Business maintenance expenses
  • Construction of outdoor seating
  • Business supplies (including protective equipment and cleaning materials)
  • Business food and beverage expenses (including raw materials)
  • Covered supplier costs
  • Business operating expenses

In a statement, Illinois Restaurant Association President and Chief Executive Officer Sam Toia said there probably won’t be enough money to fund every application in this first round:

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“The Restaurant Revitalization Fund is exactly the kind of relief restaurants have advocated for throughout this devastating year, especially here in Illinois, where job losses total more than 103,000. Having funds set aside for small businesses, as well as establishments that are owned and led by women, veterans, and socially and economically disadvantaged individuals is a critical element in the industry’s potential for long-term recovery. We encourage all operators to apply as soon as possible, as there will likely not be enough funds to fulfill every application with the current round of funding. We are actively working alongside the National Restaurant Association and our state restaurant association partners to urge Congress to replenish the RRF when funds are depleted.”

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