The Restaurant Revitalization Fund (RRF), part of the American Rescue Plan that congresses passed in March this year, is a grant program that was thought to be a lifeline for restaurants that have been struggling during the pandemic. However, the grant program is already running out of money. With $65 billion worth of applications already received since it opened on May 3rd, and only $26.5 billion bookmarked for the program, it seems many of the more than 250,000 applicants will be out of luck. Congress did pledge to prioritize minority and veteran owned businesses, but it will otherwise be a first come first serve style distribution of funds.
The good news, for restaurants that are able to apply and receive money, is that compared to the Payroll Protection Act passed last year, there are far fewer restrictions on how business owners can spend the funds. Instead of having to spend the money on payroll in a very short period of time, recipients are free to use the funds however they see fit to keep their businesses open, and have until 2023 to spend the money. The goal is to make up for revenue lost during the pandemic, applicants can compare their 2019 tax returns to 2020 and apply for funds to make up the difference.
Unfortunately, a restaurant has to still be in operation to qualify for any of the grants. Shuttered businesses aren’t going to get a lifeline to reopen, but it still may help reduce the number of restaurants that have to permanently close (estimated to be about 53% of restaurants that shut down during the pandemic, according to Yelp). Many across the industry had hoped that more aid would be available for hospitality businesses, Oregon representative Earl Blumenauer, one of the original authors of the legislation, had pushed for a $120 billion pool for restaurants, but congress slimmed that down to under $30 billion in the final bill. The fact that minority and veteran businesses are being prioritized (during the first 3 weeks of applications) should help to even out some of the effect of the prior PPP act from last year, however many critics argue that larger corporations and chains are still receiving aid disproportionately.
With the end of the pandemic in sight, or at least the end of most lockdown restrictions, there is hope that the worst of the damage is behind us and that local businesses can start to rebuild. In reality, the pandemic has permanently changed many areas of the country, with favored local jaunts permanently gone and the landscape of in-person dining likely permanently altered. Still, as the vaccine rollout intensifies across the country, those restaurants that are fortunate enough to still be in business can at least look forward to welcoming patrons back through their doors soon.