The Congress Restaurant Revitalization Fund is already strapped for cash
Throughout the pandemic, restaurants have struggled to access financial support from the federal government, so when the US bailout stimulus bill, which was enacted in March 2021, included a revitalization fund of $ 28.6 billion restaurants, it was seen as a lifeline. Unlike the much maligned Paycheck Protection Program loans, this money must be distributed in the form of grants, do not loans and will not have to be repaid by restaurateurs if used by March 2023. But there is a big problem: the fund, which started accepting requests on May 3, is already running out.
According to Los Angeles Times, the Small Business Administration, which is responsible for overseeing the program, has received more than a quarter of a million requests, asking for $ 65 billion in financial assistance. That’s more than double the amount in the fund, and once again, many restaurateurs are struggling to stay afloat without help from the federal government. After a year of struggles over the pandemic, it’s a painfully familiar feeling for restaurateurs and workers.
Although the restaurant industry has been hit harder than perhaps any other – with customers urged not to dine out and restaurant workers at high risk of contracting COVID-19 within limits narrow kitchens and dining rooms – Food workers and restaurateurs have not been prioritized for federal bailouts or industry-specific relief programs. According to a Yelp report in June of last year, around 53% of restaurants closed since March 1, 2020 have closed permanently. Since then, the number of restaurant closings has increased every week.
Loans from the Paycheck Protection Program, introduced last year to help restaurants cover staff costs, leave a lot to be desired. For these loans to be canceled, most of the money had to be used to keep staff on the payroll, although the limited capacity and restrictions on meals inside made it nearly impossible to hold and pay a loan. full staff. And before many small restaurant owners could even get a loan, huge restaurant chains ran out of funds.
For businesses that receive this latest round of SBA funds, grants can be equal to the amount of revenue lost by a restaurant during the pandemic, capped at $ 10 million per business and $ 5 million per location. In response to frustration with the very limited and restrictive ways to spend P3 money, restaurateurs have been given greater autonomy in deciding where to direct those funds to keep their businesses open and their staff employed. This huge pool of cash goes a long way in supporting restaurants as they continue to navigate the restaurant world during a pandemic.
But when the program was first proposed by Oregon Representative Earl Blumenauer last year, he hoped the fund would distribute $ 120 billion in grants. According to Time According to Blumenauer, it was expected that the fund would be very popular and his colleagues might have to approve more funding once they saw how high the demand was compared to the greatly reduced fund that was going through Congress.
Restaurant owners, lobbyists and food industry activists are frustrated that after a year of advocating for a restaurant-specific relief fund, the money will again dry up before the majority of restaurateurs have received no help. In a statement to TimeSean Kennedy, a spokesperson for the National Restaurant Association, said, “Right now the SBA has over $ 36 billion in applications from struggling small independent businesses that will not receive funding.”
The frustration with the late deployment of the fund and its limited impact is justified. Equally frustrating is that if the fund had received even a portion of the additional $ 90 billion that was originally offered, it would still have the resources to help many more restaurants. But while the disappointment is real and the urgency immediate, the fund possesses be more aware of how the existing money will be distributed. Unlike the PPP program, which left loopholes for big chains to apply for huge loans (franchises can still apply for these grants), the Restaurant Revitalization Fund aimed to reach out to businesses owned by women, veterans and people from the past. economically and socially disadvantaged groups – many of them missed the first rounds of financial assistance.
The Small Business Administration has prioritized these companies by prioritizing their applications for the first three weeks of the fund’s existence. This means that in theory, the majority of grants that have been accepted will go to business owners of color, women, veterans and others who have been hit hard by the pandemic. But it also means that countless restaurants owned by members of marginalized and oppressed communities are still suffering and will not see a dollar in this round of grants. Hopefully Rep. Blumenauer was correct in assuming that the funding will be rejuvenated once his colleagues see how necessary it is. Hopefully the funds will arrive soon, as many restaurants are hanging by a thread.