Lawmakers from both parties are pushing to shore up a new relief fund for restaurants that is already on track to run out of money.
Less than two weeks since the $28.6 billion Restaurant Revitalization Fund opened for business, demand for aid has outstripped supply. More than 266,000 restaurants have requested more than $65 billion to replenish revenue lost to the COVID-19 pandemic, the Small Business Administration reported this week.
Officials have said they knew from the outset that more money would be needed. Initial legislation called for $120 billion, but the pandemic relief package that became law in March included only $28.6 billion.
“The extraordinary demand for the Restaurant Revitalization Fund shows that Congress must do more to help,” Rep. Earl Blumenauer, D-Ore., Rep. Brian Fitzpatrick, R-Pa., Sen. Kyrsten Sinema, D-Ariz., and Sen. Roger Wicker, R-Miss., said in a joint statement. “We need to work swiftly in a bipartisan way to replenish this critical fund so that all local restaurants can access the relief required for a full recovery.”
The four lawmakers sponsored the original legislation to create the fund. Sinema’s backing of a new round of aid could bolster prospects for passage since the Arizona Democrat is often a swing vote in the evenly divided Senate.
When the relief law passed in March, Sinema touted the support of the Arizona Restaurant Association and businesses like Tempe-based Arizona Distilling Co. and Thumb Butte Distillery in Prescott, Ariz. Sinema said restaurants were responsible for 11 percent of Arizona jobs in 2019, before the pandemic struck.
The pandemic has battered the restaurant industry, which has struggled through closures and limited-capacity seating over the past year. Revenue was down by nearly $240 billion and 2.5 million employees were out of work, based on a December survey by the National Restaurant Association. About 110,000 restaurants have permanently or temporarily closed.
Since the fund opened on May 3, 21,000 restaurants have received a total of $2.7 billion in aid, according to the Small Business Administration, which manages the program.
The Biden administration has taken steps to target much of the initial aid to smaller restaurants and those from disadvantaged backgrounds, as the pandemic relief law requires. More than 147,000 applications came from women, veterans and “socially and economically disadvantaged business owners,” who collectively requested $29 billion in relief, the SBA said.
“The numbers show that we’ve been particularly successful at reaching the smallest restaurants and underserved communities that have struggled to access relief,” said SBA Administrator Isabella Guzman. “We are making progress, but we have much more work to do as we continue reaching our underserved entrepreneurs.”
But the focus on disadvantaged groups, which when fully distributed would eat up the entire initial funding allocation for the program, has also triggered a court challenge. The Wisconsin Institute for Law and Liberty, a conservative legal advocacy group, filed a lawsuit Wednesday against Guzman, saying white men are being “pushed to the back of the line” for aid, The Associated Press reported.
The restaurant grant program can be used to cover expenses incurred since Feb. 15, 2020, lasting through March 2023. Legitimate expenses include payroll, mortgage payments, maintenance, food, supplies and more.
Grants can’t exceed $5 million per business or $10 million per restaurant group. The COVID-19 aid law mandates that priority will be given to women, veteran-owned businesses, and socially and economically disadvantaged groups during the initial 21-day period the fund is open.
In addition, $5 billion of the total $28.6 billion in assistance is set aside for businesses with less than $500,000 in 2019 gross receipts, further limiting the program’s availability unless Congress tops off the fund.
Businesses eligible for a piece of the fund include “a restaurant, food stand, food truck, food cart, caterer, saloon, inn, tavern, bar, lounge, brewpub, tasting room, taproom, licensed facility or premise of a beverage alcohol producer where the public may taste, sample, or purchase products, or other similar place of business in which the public or patrons assemble for the primary purpose of being served food or drink.”
The coronavirus relief law also makes clear that the same businesses located in airport terminals or owned by tribal governments are eligible. However, a recipient can’t have owned or operated more than 20 locations prior to the pandemic-related economic shutdowns last March and can’t be publicly traded.