To ensure more restaurants get the help they deserve, the National Restaurant Association is kick-starting a grassroots campaign to support the $60 billion Restaurant Revitalization Fund Replenishment Act.
The bipartisan bill, set to be introduced in Congress Thursday, would add more cash to the $28.6 billion Restaurant Revitalization Fund, which already ran out of grant money. Sens. Kyrsten Sinema and Roger Wicker, along with Reps. Earl Blumenauer and Brian Fitzpatrick, are leading the charge in Congress.
Within the first hour of pre-registration for the RFF, more than 41,000 people joined—an early indicator that the billions of dollars may not be adequate. Sure enough, by the time the fund closed on May 24, the Small Business Administration received more than 362,000 applications requesting $75 billion in funding in the three weeks the application portal was open, with an average grant application just over $200,000. The figures mean more than half of eating and drinking places open at the start of COVID operated with “severe revenue loss” last year, according to the Association.
The SBA estimates that it needs at least an additional $50 billion just to fund the applications submitted before the application portal was closed, the Association said.
“When the RRF portal closed in May, small business restaurant owners all wanted to know ‘what’s next’ for their pending applications,” said Sean Kennedy, the Association’s executive vice president of public affairs, in a statement. “The introduction of this additional $60 billion in funding not only answers that question but proves once again that Congress understands and supports the foodservice industry.”
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The lack of funding has affected independent operators nationwide.
Amy Long, co-owner of Orchard At The Office in Richardson, Texas, said that before COVID, her business grew at a record rate. But the pandemic sank business as much as 95 percent in 2020. The restaurant utilized multiple rounds of the Paycheck Protection Program and Economic Injury Disaster Loan program, but it hasn’t been enough. Long said if Congress doesn’t pass the $60 billion, she will have to close her business permanently. Antwan Smalls, co-owner of My Three Sons of Charleston in Charleston, South Carolina, said the RRF provided him a “ray of hope,” but now that the fund has been depleted, he fears he won’t get the relief he needs to keep his business open. Nina Compton, chef/owner of Compere Lapin and Bywater American Bistro in New Orleans, said she applied for the RFF as soon as it open, but there wasn’t enough money for her restaurant.
Joining these independent operators in solidarity, Erika Polmar, executive director of the Independent Restaurant Coalition, said as long as locally owned restaurants and bars are still hurting, the Coalition will keep fighting. Per the organization, one point of sale system, calculates restaurants and bars are eligible for at least $168 billion in RRF grants.
“Refilling the Restaurant Revitalization Fund is the most important thing Congress can do to get their constituents back on their feet and help their communities thrive,” Polmar said in a statement. “The pandemic left independent restaurants and bars with rising costs, reluctant customers, and ongoing restrictions on dining from state governments nationwide. These headwinds will be insurmountable for many businesses through no fault of their own. The IRC is thrilled to see Senators Wicker and Sinema and Representatives Blumenauer and Fitzpatrick stand together to protect this industry and urge all members of Congress to support refilling the Restaurant Revitalization Fund.”
The RRF is part of President Joe Biden’s $1.9 trillion American Rescue Plan, which passed in early March. Eligible restaurants must meet certain conditions. As of March 13, 2020, the restaurant must own or operate (together with any affiliated business) 20 or fewer locations, regardless of name or type of business at those locations. SBA may provide funding up to $5 million per location, not to exceed $10 million total for the applicant and any affiliated businesses. The minimum award is $1,000.
The direct grants cover numerous expenses, including payroll, mortgage/rent, debt service, utilities, construction of outdoor seating, maintenance, supplies, food and beverage costs, supplier costs, and various other operating expenses.
In the first several days, the application process prioritized restaurants owned by women, veterans, and socially and economically disadvantaged individuals. The initial two weeks saw applications from more than 122,000 women business owners, more than 14,000 veteran business owners, and more than 71,000 economically and socially disadvantaged individuals. In that period, 57 percent of submitted applications came from those select groups.
Even with the additional $60 billion, the RFF won’t come close to covering the $290 billion in sales the restaurant industry has lost since shutdowns began in March 2020. Additionally, 90,000 restaurants have closed permanently or long-term and roughly 1.5 jobs have not been recovered.
“The success of the RRF so far is, in large part, because the SBA focused on making the program simple and accessible,” Kennedy said. “We appreciate how swiftly they were able to establish a program unlike anything they had administrated before and believe it has the structure to sustain additional funding.”
“For much of the country, life is starting to feel close to normal,” he added. “While restaurants are optimistic about this trend, we’re still in the early days of rebuilding and are far from recovery. Industry revenue continues to be below expectations and in many states we’re still operating under limitations. To make sure we don’t lose our rebuilding momentum, we will continue to focus on creating access to the tools the industry needs to address outstanding obligations and to manage the new challenges that could slow our recovery.”