Federal restoration aid runs out, leaving many homeowners hungry
New York restaurant owner Philippe Massoud is in desperate need of an injection of money from the federal grant program put in place to save businesses like his. But he doesn’t count on one.
“It’s absolutely vital because right now on the books, with all the money that’s owed and that’s not forgivable, we’re all going to walk with a chain and a ball for God knows how long.” Massoud said of his restaurant’s financial situation after more than a year of operation under pandemic restrictions.
His pessimism about federal aid stems from the fact that hundreds of thousands of restaurateurs are vying for the aid of the, which closed to new applicants on Monday.
The US Small Business Administration has made it clear that it, minority-owned businesses and veterans for three weeks starting May 3, after which eligibility was to open more widely. But on May 18, the SBA reported that it had already received about 303,000 requests for a total of more than $ 69 billion in relief funds.
Mr. Massoud, born in Lebanon, said he applied for a grant “as soon as” applications opened on May 3.
“We applied as soon as we could, and of course there is no more money,” Massoud said of the rescue program. “We do not have priority in the context of being a minority, although as an Arab American I am [a minority]. But we’ve been advised to apply just in case there’s anything left, and obviously there’s nothing left. “
He suspects that thousands of restaurateurs across the United States will face a predicament – a lack of assistance from the grant program created to help them – as the struggling restaurant industry begins to gain a foothold after the COVID-19 recession, more than a year since. the pandemic has started.
Ask for a second help
Business owners and their advocates are already calling for the fund to be replenished.
“The vast majority of independent restaurants and bars are still struggling to make ends meet through no fault of their own and [we] will advocate for the Restaurant Revitalization Fund to remain fully funded until everyone in need of relief can get it, ”said Erika Polmar, executive director of the Independent Restaurant Coalition, a group of chefs and restaurateurs independent who lobbied for a. “Restaurants have been a thriving part of our economy for many years and, with the right tools, can help families and communities recover quickly.
It remains to be seen whether Congress would distribute more than billions of dollars. Meanwhile, some Republican lawmakers say the existing $ 29 billion pot discriminates against low-priority business owners – anyone who is not a woman, a veteran, or someone who is socially or economically disadvantaged.
A group of Republican lawmakers sent a letter to SBA administrator Isabella Guzman last week, indicating that closing the portal on May 24 effectively prevents owners of non-priority restaurants from receiving funds. They called the move “unacceptable” and asked the administration to provide detailed data on grants by May 28 – including the immigration status of recipients.
“Fairness must be the guiding principle of all government programs. I refuse to stand by and allow the SBA to pick winners and losers for the resources that should be available to small businesses of ALL backgrounds,” said Rep. Blaine Luetkemeyer of Missouri, a senior member of the House Small Business Committee.
A federal judge disagreed with this argument on May 24 when hewhich aimed to put an immediate end to the priority status of restaurants and bars belonging to women and certain minorities.
“Congress has assembled a myriad of evidence suggesting that minority-owned small businesses … have suffered more severely than other types of businesses during the COVID-19 pandemic,” said U.S. District Judge Travis McDonough in Knoxville, Tennessee, denying a temporary restraining order. researched by the Wisconsin Institute for Law & Liberty. “[The government’s] the first attempts at general economic stimulus … have disproportionately failed to help these businesses directly because of historical patterns of discrimination. “
The Wisconsin-based legal group is appealing the ruling.
“We will not get any funds”
Colorado restaurateur Bobby Stuckey, who runs Pizzeria Locale and Tavernetta, two of Denver’s most popular restaurants, among others, told CBS MoneyWatch he was “fairly aware that we won’t get any funds” from the program.
“We applied on the first day, nervously, when the portal opened, and we were very excited. But we are very realistic that we might not get funds as rumor has it that all funds are went for that first installment, ”Stuckey said. He would regard any kind of financial reward as a “wonderful miracle”.
He doesn’t hold it against business owners whose applications came before his, especially since many loans to all kinds of businesses with fewer than 500 workers. Instead, Stuckey believes the federal government should allocate more money to the restoration fund, given that many types of foodservice establishments have suffered during the pandemic.which has provided hundreds of billions of dollars in low forgiveness
“If you have a restaurant that doesn’t have a good patio or an outside dining area, or if you’ve done fine dining that doesn’t translate to ‘take out’ so much, you could be a powerful restaurant. and thriving with 20 years of history but your need might still be very desperate right now, ”Stuckey said.
Even Alex Pincus, whose hospitality group, Crew, which specializes in al fresco dining, thrived during the pandemic, said he had “no cushion” financially as he brought his restaurants up to date. day.
While Pincus is eligible for a $ 2.5 million RRF grant to cover losses at four restaurants, three of which are located in New York City, he is concerned that all funds will be discussed before his application is even considered. .
“It’s definitely vital to our sustainability as a business. I can’t say for sure that we’re going to be 100% shutting down without it, but it will make things a lot more comfortable and viable,” said Pincus.
Ed McFarland,, with restaurants in lower Manhattan and Sag Harbor, New York, also needs a grant, but knows it’s far from guaranteed, which is equivalent to receiving funds to “win a lottery ticket.” smaller”.
“It changed our lives”
Even Dana Rodriguez, a Mexican immigrant who owns two small restaurants in Denver, wasn’t sure she would see any relief from the fund created to help business owners like her – until the end of last week.
“When the RRF came in we were very excited, but I didn’t have my heart set on it,” Rodriguez said. “I figured if you do the math, there are so many restaurants that there won’t be enough money.”
Closed for six months during the pandemic, it reopened its two facilities, SuperMegaBien and Work & Class, in early May, and worked to rebuild them as its grant application went through the SBA approval process. .
Rodriguez said his operating costs increased significantly during the pandemic. In particular, her payroll nearly doubled from $ 450,000 per year at the two restaurants to $ 800,000 as she hired and trained a mostly new team of hosts, servers and chefs.
Her skeptical view changed last Friday when she received a notice from her bank warning her of a deposit in her account. She looked for the amount: it was a six-figure sum.
“That morning it changed our lives. It changed everything. And it’s a feeling that I hope everyone will feel, because we’ve all been through a very difficult time, and seeing that number on your account when you wake up to give yourself the confidence that you can keep doing. what you love and do business, ”Rodriguez said. “It literally saved our business.”