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Restaurants could get another shot at federal grants

Restaurant Business - Peter Romeo | Published on 6/10/2021

The restaurant industry is mustering support for a Congressional proposal to replenish the Restaurant Revitalization Fund (RRF) with $60 billion in additional direct relief for hard-pressed small operators.

The RRF Replenishment Act of 2021 will be introduced Thursday, according to the National Restaurant Association. The trade group said it’s launching a grass-roots support campaign to win bipartisan support for the bill, which would restart a grant program that has already channeled $28.6 billion to operators of fewer than 20 units.

Officials of the relief program’s parent agency, the U.S. Small Business Administration, have indicated that restaurant companies shut out from the first flight of grants would automatically have a shot at the new funds if they’ve submitted an application. The SBA stopped taking applications in mid-May because it had already received 362,000 requests for $76 billion in aid, or far more than could be satisfied with the initial funding.

Another federal aid program widely used by restaurants, the Paycheck Protection Program, closed its application portal on May 31, limiting the industry’s aid options to much smaller state, national and private-sector relief efforts.

“When the RRF portal closed in May, small business restaurant owners all wanted to know ‘what’s next’ for their pending applications,” Sean Kennedy, EVP of public affairs for the restaurant association, said 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.”

The industry has rebounded strongly from the sales freefall of the pandemic, but not all sectors have shared equally in the recovery. While burger, pizza and chicken chains are enjoying some of the sharpest upswings in sales and traffic they’ve ever experienced, many full-service and independent restaurants are still struggling because of continuing capacity restrictions and social-distancing requirements. In addition, many are delinquent on such expenses as rent and debt service. They also face the prospect of repaying Paycheck Protection Program loans that weren’t forgiven. Authorities say the struggle is particularly intense for small operators.

The association characterized a re-up of the RRF as a lifeline for those businesses.

“For much of the country, life is starting to feel close to normal. While restaurants are optimistic about this trend, we’re still in the early days of rebuilding and are far from recovery,” said Kennedy. “Industry revenue continues to be below expectations and in many states we’re still operating under limitations.”

The RRF was created as part of the $1.9 trillion American Rescue Plan, which President Biden signed into law in mid-March. Although not a single Republican voted for the whole plan, the RRF component was co-authored by senators from both political parties.

Advocates of an RRF re-up express hopes that bipartisan support can be mustered again.