Sen Mediterranean Restaurant, a tapas bar at Sudley Road, informed customers, via social media, on Monday, that it will not reopen.
Owner Mustafa Sen said this was a 'heartbreaking' decision to make, with it being the 'longest running' restaurant in Bognor.
However, after being 'utterly overwhelmed' by 'kind posts, comments, stories and shares' from customers, the restaurant has renewed hope that it will remain open.
In a Facebook post last night, the restaurant wrote: "We have also had the [Arun District] Council contact us offering any help they can to help keep SEN staying open.
"You will all be pleased to hear that we are going to try our hardest to keep SEN going through these ridiculously tough times!
"We hope to be back open Thursday for normal hours but please keep checking the page for updates."
The tapas bar was put under threat of closure because of the financial challenges caused by pandemic.
Mr Sen, who opened the restaurant 20 years ago, said the business is 'not stable for takeaway'.
"Tapas is usually something you sit in and eat," he said. "After Covid[-19] we don't know what to expect.
"It's one of the oldest restaurants with a good reputation and it's because of the situation at the moment that it was [in danger].
"A lot of people on Facebook showed their emotion. People have got lots of memories here.
"Hopefully it will be okay. The council sent me an email to say they would try their best to support us.
"We're looking for the community to support us when Covid is over."
The district council said a second round of grant funding is now available for certain small businesses within Arun.
Discretionary Business Grants are for small business owners who can demonstrate they have suffered a 'significant reduction in income' due to the Covid-19 pandemic.
A spokesperson said: "To date, Arun District Council has dealt with 1,571 applications for the grant and is in the process of paying out more than £700,000 but we are keen for more businesses to claim the funding they are entitled to.
"Only businesses that have not already received a Small Business or Retail, Hospitality and Leisure Grant can apply, and grants will be allocated on a first come, first served basis."
If you think your business may be eligible, please visit www.arun.gov.uk/business-covid-19 to check the criteria before applying.
James Walsh, council leader and cabinet member for economy, said: "This is an exceptionally difficult time for Arun’s businesses and this grant funding could really help to support the numerous small and micro businesses that are eligible for help but have not yet applied.
“We would urge small business owners who have not received any grant funding so far to read the criteria then put in application straight away if eligible as we want as many enterprises as possible to benefit from this funding pot.”
A message from the Editor, Gary Shipton:
In order for us to continue to provide high quality and trusted local news, I am asking you to please purchase a copy of our newspapers.
With the coronavirus lockdown having a major impact on many of our local valued advertisers - and consequently the advertising that we receive - we are more reliant than ever on you helping us to provide you with news and information by buying a copy of our newspapers.
Our journalists are highly trained and our content is independently regulated by IPSO to some of the most rigorous standards in the world. But being your eyes and ears comes at a price. So we need your support more than ever to buy our newspapers during this crisis.
Stay safe, and best wishes.