by Walter Judge, Jr Many of Vermont’s and America’s stressed and deserving restaurants qualified for Restaurant Revitalization Fund relief grants and applied for them, but never got them because the program ran out of money. Please demand that Congress replenish the funding for this critical COVID-19 relief package!
On March 11, 2021 President Biden signed into law the American Rescue Plan Act that contained a $28.6 Billion relief grant package for America’s struggling restaurants known as the Restaurant Revitalization Fund (RRF). The RRF was to be administered by the U.S. Small Business Administration, and the SBA officially began accepting applications on May 3, 2021. The key to the RRF grant program was that it was a grant program, not a loan program, and was intended to compensate restaurants for their year-on-year revenue losses in 2020 compared to 2019 (i.e., pre-COVID) even if the restaurant obtained PPP loans.
The problem is that the RRF applications have totaled approximately 370,000 so far, but the $28.6 Billion in the program was exhausted with the first 105,000 applications, and the SBA stopped accepting applications. There is activity in Congress to replenish the RRF fund, but so far there is no news from the SBA on whether the application portal will re-open (and, if so, when).
[As of June 30, 2021, the US SBA is reporting that 101,004 restaurants in the US have received $28,574,979,472. Vermont has received 366 grants valued at $77,060,625. Altogether, restaurants have submitted 278,304 RRF grant applications totaling $72,233,280,031. Vermont restaurants submitted 947 applications valued at $197,628,169. The average national grant size was $283,000. See data tables below.]
According to the US SBA, 366 Vermont restaurants received RRF grants, nearly 600 Vermont restaurant applications were left unfunded when the money ran out.
A bi-partisan bill has been introduced in Congress to add $60 Billion to the RRF program so that the SBA can continue granting applications. The Restaurant Revitalization Fund Replenishment Act of 2021 was introduced by Senators Kyrsten Sinema (D-Az.) and Roger Wicker (R-Miss.) and Representatives Earl Blumenauer (D-Or.) and Brian Fitzpatrick (R-Pa.). Vermont’s Rep. Peter Welch is one of the 180 co-sponsors of the bill in the U.S. House.
You can help! You can write to Congressman Welch or any of the other 180 co-sponsors and tell them that America’s struggling restaurants were especially hard hit by the pandemic shutdown and need our help. Here are some facts:
- While restaurants are beginning to return to their normal, pre-pandemic operations, returning to “normal” operations won’t make up for more than a year’s worth of lagging consumer confidence, a drastic reduction in revenue from losses of private and public events, tourism, and business travel, and restrictions on capacity.
- Independent restaurants are uniquely and devastatingly impacted by this pandemic. They do not have shareholders or corporate backstops to help cushion losses, and, with already low profit margins, there isn't money sitting in the bank to keep them afloat. Even during closures, fixed costs continued to accrue, leaving many businesses devastated.
- A 2020 economic report found that a $120B investment would generate over $270B in economic activity, and reduce unemployment by up to 2.4%, saving states $30.7B in unemployment benefits, all while generating significant tax revenue.
Walter E Judge, Jr is the Director, Litigation Group, Downs Rachlin Martin PLLC
