ALBANY — Struggling restaurants and bars will soon be eligible for millions of dollars in state and federal grants, funds intended to help them rebound from the devastating toll the pandemic took on their businesses.

The new state budget includes an $800 million recovery fund aimed at small businesses as well as for-profit arts and cultural institutions impacted by the pandemic.

Restaurants in the upstate region are expected to qualify as well for funding once the program is set up by the Empire State Development Corp., said Scott Wexler, director of the Empire State Restaurant & Tavern Association.

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Needed support

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While the program is still being constructed, Wexler said he hopes applications can be submitted at some point in May, with the possibility of grants being distributed in June.

“For most of the last year, as our members were dealing with the public health restrictions and the economic pressure that was causing, we told the state and federal governments we needed their support for these restaurants to survive,” Wexler said.

In adjusting to the pandemic, many restaurants have invested significant sums in patios, decks, outdoor furnishings and contactless technology.

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Sales slump

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Those expenses are expected to be eligible for coverage through the state grant program, if the business in question fits within the parameters for the funding.

According to the National Restaurant Association, more than 110,000 restaurants closed nationally in 2020. In another barometer of the economic wipeout, the industry estimates total 2020 sales slumped by $240 billion below the association’s pre-pandemic forecast.

The industry estimates 2 million restaurant workers remain out of work, though many businesses are beginning to recover as restrictions lessen and more people get COVID-19 vaccinations.

“The economic crisis for our industry was consistent with the public health crisis — because it was caused by the public health crisis,” Wexler noted.

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‘We suffered’

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He said owners and employees did all they could to comply with government mandates and health protocols because they wanted to have a role in halting the spread of the virus.

“We did these things, and we suffered,” he said.

In Niagara Falls, Eamon Webber, whose family operates the Wine on Third restaurant, said that business has been more fortunate than many others and is combing back strong now from the slow periods of 2020.

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‘Return to work’ credit

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Whether the business will get in line for grants will likely be considered, but he said it is important for the government to recognize how vital restaurants and other family-operated businesses are for communities.

“The more grants for small mom-and-pop restaurants, the better,” Weber said. “They provide tons of jobs and they were the No. 1 targeted businesses from all the rules.”

The state budget also includes a $35 million “return to work” tax credit targeted at New York restaurants.

“The government is making an investment in our businesses and now we just need the programs stood up so the money can go out the door,” said Wexler, noting he has been in regular contact with officials at Empire State Development since the budget was completed two weeks ago.

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Conditions

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Meanwhile, restaurants throughout the nation will be eligible for $28.6 billion in relief grants as a result of the recent federal stimulus legislation. The funding is being administered by the federal Small Business Administration.

Wexler said U.S. Sen. Charles Schumer, D-N.Y., played an important role in securing the grant money for the industry.

Under the guidelines for the federal program, restaurants are ineligible if they closed permanently. They also can’t get a federal grant if they filed for Chapter 7 bankruptcy or have liquidated under Chapter 11 bankruptcy.

Restaurants can’t apply for a grant if they have closed permanently, have filed for Chapter 7 bankruptcy or have liquidated under Chapter 11 bankruptcy. Operators are also ineligible if they filed for Chapter 11, 12 or 13 bankruptcy without an approved reorganization plan.

The funding is expected to be exhausted quickly by an expected torrent of applications from business operators.

Patrick Kelley, the associate administrator for the SBA’s Office of Capital Access, advised the Independent Restaurant Coalition this week that restaurant operators should apply for the grants on the first day the program opens, according to Restaurant Dive, a trade publication.

The SBA is expecting to begin accepting applications late this month or in early May, according to the Empire State Restaurant & Tavern Association.