$83 Million In Restaurant Aid Will Go To Previously Denied Operators
The past few years have held no shortage of adversaries to small restaurants. Point-of-sale system Toast names the COVID-19 pandemic, record-high inflation, soaring costs of operation, and the ongoing staffing crisis as some of the industry's most formidable obstacles. The Washington Post estimates that 72,700 restaurants closed in 2020 due to the pandemic. Industry sales saw a crippling $240 billion drop in 2020 from the previous year, according to the National Restaurant Association via PBS. Per a June report by WHIO, Ohio Restaurant Association President John Barker said many businesses were still trying to recover two years later.
To prevent the restaurant industry from going under, some federal aid has been thrown at the issue. In March 2021, President Biden signed the $1.9 trillion American Rescue Plan, which included $28.6 billion in restaurant relief. Before that, the U.S. Department of the Treasury rolled out the Paycheck Protection Program as part of the CARES Act. The Program provided financial aid for small businesses to "maintain their payroll, hire back employees who may have been laid off, and cover applicable overhead."
But, now, financial relief funds are fizzling out and food inflation went through the roof in recent months. For instance, a 50-pound case of potatoes purchased by Washington D.C.'s Z Burger used to cost $30 before the pandemic (via the Washington Times). As of September 2022, the same case ran for $70. Luckily, a new grant is on its way to give the industry a helping hand.
Patience is paying off (literally)
This week, the U.S. Small Business Association (SBA) announced that it will provide $83 million in aid to previously denied restaurants, per Restaurant Business. The sum will be spread amongst 169 total businesses, all of which applied for aid last year and have been waiting on assistance since. Why the long wait? In 2021, the Restaurant Revitalization Fund (RRF) started with a pot of $28.6 billion. While that might seem like a healthy budget, it turned out to be a meager band-aid. The Fund was mostly depleted in just three weeks. Then, the SBA was sued for violating federal anti-discrimination rules. (The violation was prioritizing women-owned and socially disadvantaged businesses in aid distribution.) Still, as a result, roughly 177,3000 restaurants promised aid by the SBA never got it; some even had to give their grants back.
Now, nearly 200 businesses that have been stranded on the waiting list since last year are finally receiving aid. Judging by recent economic trends, it looks like this relief might be coming just in time. According to OpenTable, while food prices have increased by roughly 18% this year, 89% of customers say higher restaurant prices put a bad taste in their mouths. Luckily, the only stipulation to this new grant is that restaurants must spend it all by March 2023. The SBA's latest move could (at long last) mark a shifting of the tides for small businesses.