Biden bailout restaurant aid runs out of money

WASHINGTON – The Biden administration has ended a federal program that provided assistance to financially injured restaurants during the COVID-19 pandemic after a large demand for funds ran out, leaving more than two-thirds of applicants without assistance.

Restaurant chefs are asking for additional funding to keep the program afloat, but it’s not clear if Congress will act. The White House would not pledge on Friday to support legislation to replenish the funds.

The US Small Business Administration announced the closure of the Restaurant Revitalization Fund after it depleted $ 28.6 billion in funds allocated in President Joe Biden’s $ 1.9 trillion US bailout. The program has awarded grants to more than 105,000 restaurants – less than a third of the 370,000 restaurants that have applied since the SBA began accepting applications on May 3. Applications totaled $ 72 billion in applications.

“Due to overwhelming demand, the SBA has not been able to fund all qualified claims with the initial credit provided for in the American Rescue Plan Act,” the SBA informed Wednesday.

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The SBA has said it is retaining applicants from those who have not received grants in case Congress provides additional funds. The administration plans to deactivate the program’s online portal on July 14. Restaurants have not been able to apply since May 24.

Weeks after its launch, the restaurant fund suffered a heavy blow when federal court decisions in Texas and Tennessee sided with white business owners who sued the federal government because the program gave the priority to restaurants belonging to minorities, women or veterans. As a result, nearly 3,000 initially funded applicants did not receive the assistance promised to them.

About 90,000 restaurants and bars have closed due to restrictions during the pandemic, according to the National Restaurant Association, and industry revenue has declined by about $ 280 billion.

Biden visited a Mexican restaurant in Washington in May to highlight the program, which allowed restaurants, bars, food trucks and other catering establishments to apply for grants of up to $ 10 million per business and $ 5 million by location. The average grant amount awarded was $ 283,000. Restaurants can use the money for payroll, rent, supplies, and other qualifying prosecutions, and do not have to repay it as long as it is used by March 11, 2023.

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Amanda Cohen, owner of Dirt Candy, a vegetable-based restaurant in Manhattan, was among hundreds of thousands of restaurateurs who applied for funding but did not get a grant.

“It will affect our bottom line and how we can pay people and how we can recover from the past year and a half,” she said. Cohen requested help within the first 30 minutes of the program going live, but his request was delayed – and never fulfilled – after the SBA asked follow-up questions about his request. His restaurant represented only 20% of his typical activity during the pandemic.

“Some people got the funding and some didn’t, and I’m so happy for the people who did. But that sort of puts us in two different categories in terms of the haves and have-nots.”

After:The economy created 850,000 jobs in June and unemployment rose to 5.9% as COVID cases fell, states lifted restrictions, and vaccinations increased

The inclusion of the catering fund in Biden’s COVID-19 bailout – which Democrats in Congress approved in March – came after months of lobbying from the restaurant industry, which recommended $ 120 billion to respond to needs. Senate Majority Leader Chuck Schumer, DN.Y, called $ 28.6 billion a “down payment” after it was passed.

“Now we need the rest of the payment. Said Erika Polmar, executive director of the Independent Restaurant Coalition, which represents small restaurants and non-chains. She said restaurants “never had the illusion” that $ 28.6 billion would be enough.

In this photo taken on June 15, 2021, kitchen staff continue to wear face masks while preparing breakfast at Langer's Delicatessen-Restaurant in Los Angeles, Calif., On the first day of its economy fully reopening after a fifteen months of restrictions linked to the coronavirus pandemic.  - On June 17, 2021, California state regulators approved revised pandemic workplace rules ending most mask requirements for employees vaccinated against the coronavirus.

Legislation introduced last month by a bipartisan group of lawmakers would provide $ 60 billion in additional funding to the Restaurant Revitalization Fund. The effort is led by Reps Earl Blumenauer, D-Ore and Brian Fitzpatrick, R-Pa., And Sens. Roger Wicker, R-Miss, and Kyrsten Sinema, D-Ariz.

In a statement, White House Deputy Press Secretary Chris Meagher said the Restaurant Revitalization Fund provided $ 1 billion to veteran-owned businesses, $ 6.7 billion to veteran-owned businesses. socially and economically disadvantaged people and $ 7.5 billion in women-owned businesses.

“We look forward to working with Congress on ways to leverage this record of benefit for small businesses,” he said, but made no commitment to support the legislation.

SBA administrator Isabel Guzman applauded the program for providing “desperately needed relief” and said the agency would continue to work to provide resources to restaurants.

Although many restaurants have reopened after safety guidelines relaxed as more Americans get vaccinated against the virus, Polmar said the industry remains in crisis. She said rising inflation has imposed new cost challenges for purchasing food. And while restaurants may seem busy, she said it was often because they were operating at limited capacity.

“Appearances can be deceptive,” she said, adding that a few weeks of increased activity does not make up for 16 months of shutdown. “The amount of debt these people have is absolutely incredible.”

Contribution: Associated Press. Contact Joey Garrison on Twitter @joeygarrison.

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