- Restaurants are part of the significant sectors in the economy that the pandemic robbed of business. They have struggled to stay afloat with little financial support from the federal government. However, they got relief in March 2021, when the American Rescue Plan stimulus bill came into place. The bill included a $28.6 billion Restaurant Revitalization Fund to act as grants for struggling restaurants. The restaurant owners would not have to return the money if it was destroyed by the end of March 2023.
However, the program came to a sudden halt on June 30. The funds ran out before serving the restaurants that were in extreme need. This left a trail of confused, distressed, and angry restaurant owners waiting to receive these funds. Now, most business owners don’t know what to expect in the coming days.
Attempts to Restore the Restaurant Revitalization Fund Falter
Congress made attempts to support the restoration of the Restaurant Revitalization Fund (RRF) but failed. There are still two pending bills looking forward to replenishing the funds. The attempts that failed include a unanimous consent of a group of senators on August 7, 2021. They wanted to add another $48 to the bill, but it failed.
Among the restaurants in distress, about 3000 priority applicants never received any funding. SBA approved the financing for these restaurants but could not issue it due to lawsuits challenging the constitutionality of prioritization of programs. These complaints came from white business owners in locations such as Texas, Tennessee, and Pennsylvania. It led to the halt of prioritized applications.
Therefore, the uncertain status of the RRF leaves hundreds of thousands of restaurants across the states in limbo. The restaurants in the marginalized and oppressed community areas started to restore their services by hiring staff and getting back to business with the SBA promise. Others were lucky to receive the latest round of SBA funds, which catered to the lost revenue during the pandemic, capped at $10 million for each business and $5 million for each location.
$48 Billion Unanimous Consent Blocked
A bipartisan group of senators raised the motion on August 7, 2021, seeking unanimous consent from the Senate floor. The consent was to provide $48 billion additional funding to enable the RRF program to continue as planned. One objection blocked the unanimous, leading to the failure of the motion.
Restaurant Revitalization Fund Replenishment Act of 2021
Congress introduced the Restaurant Revitalization Fund Replenishment Act of 2021 on June 11, 2021, to help with an additional $60 billion. The Committee on Small Business received the reference in June even before the legislation was open to voting. The bill also got immense support and 208 co-sponsors from both parties.
However, the applications for the funding rose by a whopping 362,000 businesses, requesting over $75 billion in funding. This amount is way more than the funds provided by the act at $28.6 billion. Due to the high number of applications and the unprecedented need for funds, SBA closed its application portal with a deficit of nearly $50 billion.
ENTRÉE Act
The ENTRÉE Act came into existence on July 20, 2021, from Republican Representative Blaine Luetkemeyer. The act included remission of $60 billion to the RRF by obtaining money from unspent Economic Injury Disaster Loans from the American Rescue Plan. The act currently has about 57 co-sponsors who are all Republicans, making it unlikely to pass.
These attempts show no promise of the restoration of the RRF. CreditHub helps businesses to get alternative SBA loans to continue financing their processes. You can secure both business and financial loans and enjoy top-tier lending leverage. Contact us today to find the best financing options for your business.