More than half of restaurants that haven’t received federal aid are at risk of closing

More than two years after the Covid-19 pandemic forced restaurants across the country to close, and after reopening with restrictions in place, independent establishments are still struggling to make ends meet.

While their establishments can sometimes feel busy – with crowded outdoor patios – the fallout from the initial stages of the pandemic continues to threaten independent bar and restaurant owners’ chances of survival, according to a new report from a group of independent restaurants. .

Federal aid programs offering relief in the form of grants and loans have proven insufficient to keep many establishments afloat in an industry that was already known for its tight profit margins.

The $28.6 billion Restaurant Revitalization Fund (RRF)a grant program that was part of the US bailout, supported applicants who were successful in receiving funding.

But only about one in three applicants to the programs got any money. For those who have not received subsidies, the outlook is bleak, according to the Independent Restaurant Coalition (IRC), a grassroots organization formed by independent chefs and restaurateurs to provide protection for the industry.

“The data tells us what we’ve been hearing from restaurants for more than two years: Thousands of businesses will close unless the Senate replenishes the Restaurant Revitalization Fund,” IRC executive director Erika Polmar said in a statement. statement Thursday. “After two years of missed rents, supplier and utility payments, navigating astronomical food costs and multiple COVID-19 surges that have brought businesses to a standstill, independent restaurants and bars are running out of time, options and money,” Polmar said.

Closings on the horizon

New survey data confirms this. More than half – 52% – of independent restaurants and bars that have not received RRF grants expect they will have to close within six months, according to an IRC survey. That compares to 24% of businesses that got funding but still say they might not survive another year.

In particular, landlords who have not received subsidies say they are more likely to default on their loans, have to file for bankruptcy or be evicted by their landlords.

The IRC and restaurateurs across the country hope the relief bill for hard-hit restaurants and other small businesses, passed in the House of Representatives last week, will also pass the Senate and allocate an additional $42 billion to the RRF.

A separate bill, the Small Business COVID Relief Act of 2022, has been introduced in the Senate and would add $40 billion to the RRF.

One of the lucky

Cheetie Kumar, owner of Garland, a restaurant and music venue in Raleigh, North Carolina, considers herself lucky to have received an RRF grant. Grant amounts are determined by calculating the difference between a business’s 2020 revenue and its 2019 revenue, minus the value of the Paycheck Protection Program loans it received.

Kumar said she hasn’t had a strong quarter since the pandemic began and without the funds, her restaurant currently wouldn’t exist.

“There hasn’t been three months in a row where revenue hasn’t been what it was. We’ll have a good two months or 6 good weeks, but that’s it,” she told CBS Money Watch.

“When [COVID] cases are increasing, we are seeing hesitation from diners, which is reflected in the number of reservations we are getting. When it’s crowded, people don’t want to eat at the restaurant. And our menu and our cuisine are not designed for take-out,” she said.

“A fight for us”

Kumar also needs to make the money last, given the rise of the BA.2 variant of the coronavirus and the uncertainty that awaits.

“We will have to hold the money for at least a year, if not more. If we didn’t have that money, we would be so underwater that it would be impossible to open and we would walk away with massive personal debt. , ” she says.

Although Kumar is not eligible for a second RRF fund, she is advocating for the RRF to be replenished to save her industry. She said she knows all too well how difficult it is to run a profitable restaurant and doesn’t think it’s fair that some of her neighbors have been left dry.

“I’m not asking this for my own business; we’ll find a way to survive because we got the grant. But it’s a fight for us, it’s for our industry to survive,” she said. . “If I’m the only person in our downtown community surviving this, it’s not really a community.”

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