Restaurant Revitalization Fund Burns Through All Of Its $28.6B
The Small Business Administration has stopped making grants from the $28.6B Restaurant Revitalization Fund, saying that the fund has run out of money due to heavy demand.
The SBA has been making grants from the fund for about three weeks but told applicants in an email on Wednesday that it can't fund additional applicants, The New York Times reports.
Most of the applicants for grants from the fund will receive nothing. The agency was able to pay grants of as much as $10M to 105,000 restaurant operators, but there are another 265,000 applicants who received nothing.
Well, despite submitting our application on the very first day, we were just informed @SBAgov has exhausted #RestaurantRevitalization funds before ours could be processed. Frustrating to see how this played out, with some new places getting hundreds of thousands of dollars. 1/— Reliable Tavern (@reliabletavern) July 1, 2021
“We need Congress to act on the RRF Replenishment Act to provide the SBA with the funds they need to complete this important mission," National Restaurant Association Executive Vice President of Public Affairs Sean Kennedy said in a statement. “These operators have made all of the cuts and changes they can to stay open for the last year and are once again worried they won’t make it another month."
A bill has been introduced in the Senate to add another $60B to the fund, but it has gotten no traction, Restaurant Business reports, and Congress will be in recess until later this month. The program was officially supposed to end July 14 in any case.
Under the program, restaurants were eligible for tax-free federal grants equal to the amount of their pandemic-related revenue loss, as calculated by subtracting their 2020 gross receipts from 2019 gross receipts. For restaurants not in business for all of 2019, the SBA had a separate formula for calculating the grants.
The fund wasn't designed for large chains, applying to entities that own or operate 20 or fewer establishments. Those businesses can be under the same or various names but had to be in operation as of March 13, 2020.
The industry has been recovering as pandemic-related restrictions disappear nationwide and demand for eating out has risen, but restaurants still haven't recovered to pre-2020 levels of business.
Eating and drinking places added a net 186,000 jobs in May, according to the Bureau of Labor Statistics, the fifth month in a row for employment gains, though some restaurants are reporting that it is hard to find workers. The industry is still about 1.5 million jobs short of its pre-pandemic numbers.