Half of independent restaurants will close without help

The food and service industry was among the hardest hit at the start of the COVID-19 pandemic, when the national emergency forced many to close their doors to customers.

Help has come in the form of a number of federal aid programs, the most recent of which – the Restaurant Revitalization Fund – was passed as part of President Joe Biden’s US bailout.

But new data from the Independent Restaurant Coalition has revealed that more than half of independent restaurants and bars across the country that have not received an RRF grant expect to close their doors to the public permanently within the next six months.


What do you want to know

  • New data from the Independent Restaurant Coalition has revealed that more than half of independent restaurants and bars nationwide that have not received federal funding expect to permanently close their doors to the public within the next six months.
  • Last year’s Restaurant Revitalization Fund grants were awarded to more than 100,000 small bars and restaurants, but another 177,000 potentially eligible applicants did not receive a grant due to a lack of funds.
  • The vast majority of business owners surveyed by the IRC – 86% – said they would use an RRF or other federal grant to hire more staff; other priorities include repairs, paying rent, paying utility bills, or paying suppliers
  • The U.S. House of Representatives recently passed the Relief for Restaurants and Other Hard Hit Small Business Act of 2022, which would inject an additional $42 billion into the RRF grant program.

The IRC surveyed nearly 1,000 people in 48 states, representing 1,824 restaurants and 40,062 employees nationwide. Nearly 96% of companies surveyed applied for an RRF grant, but only 14% received the relief.

Among businesses that did not receive a federal grant, 52% expect to close within six months. More than 40% of businesses that received an RRF grant said they were not at risk of closing their business at all.

The vast majority of business owners – 86% – said they would use an RRF or other federal grant to hire more staff; other priorities include repairs, paying rent, paying utility bills, or paying suppliers.

“After two years of missed rents, vendors and utility payments, navigating astronomical food costs and multiple COVID-19 surges that have brought businesses to a standstill, independent restaurants and bars are running out of time, options and money,” Erika Polmar, executive director of the Independent Restaurant Coalition, wrote in a statement. “There is only one solution to this crisis: to provide these companies with the financial support they need before it is too late.

The last round of RRF grant applications closed in July last year, by which time the Small Business Administration had received applications totaling about $76 billion, well above the authorized $28.6 billion. for the program. The SBA awarded grants to more than 100,000 small bars and restaurants, but another 177,000 potentially eligible applicants did not receive grants due to lack of funds.

Companies that have received RRF grants have until March 11, 2023 to use the money.

The IRC report came shortly after the U.S. House of Representatives passed the Relief for Restaurants and Other Hard Hit Small Business Act of 2022, which would infuse the RRF grant program with an additional $42 billion. . The bill would also allocate $13 billion toward the creation of the Hard Hit Industries rewards program, which would “help small businesses with 200 or fewer employees who have suffered a revenue loss of 40% or more,” per Rep. Nydia M. Velázquez, DN .Y., chairman of the House Small Business Committee.

“This bill will provide much-needed relief to hundreds of thousands of restaurants and other small businesses that have been hit hard by the pandemic,” Velázquez added. “The sooner this bill is enacted, the sooner these companies can start moving forward and advancing our recovery.”

But the bill only received six Republican votes in the House, leaving doubts about its survival in the equally divided Senate.

Two senators instead encouraged fellow lawmakers to approve their own bill, first introduced last August, to reinstate the RRF program. Senator Ben Cardin, D-Md. and Sen. Roger Wicker, R-Miss., proposed an infusion of $40 million for the grant program, with additional funds for small business assistance proposals from select gymnasiums, minor league team sports , transportation services and more.

“More than two years into the pandemic, hundreds of thousands of restaurants and other small businesses are still struggling to survive, while thousands have already closed for good,” Cardin said in part. “Congress cannot confuse encouraging signs that our economy is recovering with signs that hard-hit restaurants, bars and other small businesses no longer need help.”

If the Senate passes the Cardin-Wicker measure, the two pieces of legislation would be sent to a conference committee for lawmakers to iron out the differences. An agreed upon final conference report would then be sent to both legislative chambers, and it must be approved by both the House and the Senate before sending it to President Joe Biden for signature.

Chris Shepherd, chef and owner of Underbelly Hospitality in Houston, on Thursday called on the two Republican senators from Texas, Ted Cruz and John Cornyn, to support the legislation when they return from Easter vacation.

“This grant relief would secure the financial future of my restaurants while giving me the financial flexibility to become a better employer. I would use the money to raise salaries, hire more staff, and reimburse all pandemic-related expenses. which continue to weigh on my balance sheet,” Shepherd said in a statement to IRC. “The stakes are too high to toss this around any longer.”

Spectrum News has reached out to Cruz and Cornyn for comment.

About James Almanza

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