Restaurant industry calling on Congress to replenish Restaurant Revitalization Fund

SALISBURY, Md. – The restaurant industry is sending a call for help to Congress, hoping to secure more emergency funding.

Calling On Congress

The money in question is the Small Business Administration’s (SBA) $28.6 billion Restaurant Revitalization Fund (RRF). “The RRF was supposed to assist restaurants in offsetting some of those costs to make sure that they were able to continue to operate, continue to keep people employed, and continue to serve their communities that they’re located in,” said president of the Salisbury Area Chamber of Commerce Bill Chambers.

While state level relief did prove to be helpful, Chambers says he’s doubtful that more help from Annapolis won’t be coming any time soon. “I don’t believe that the General Assembly will adjust the governor’s budget to come up with a new grant program for restaurants. So, it’s really on Congress right now to get this done,” he said.

Fund Dries Up Quickly

When the SBA announced the grants last year, restaurants across the country scrambled to apply. But those funds quickly dried up. Single locations were eligible for up to $5 million. Businesses with fewer than 20 locations were eligible for $10 million. Publicly traded companies were ineligible, but their franchisees could still apply.

Mogan’s Oyster House was among those restaurants hoping to get their share. “Everybody who is still around, who has been lucky enough to continue through, has been incurring more and more debt, just to get to the other side of it,” said Mogan’s Oyster House General Manager Mike Daly. “Any hospitality-driven service has taken a massive hit this year.”

Mogan’s didn’t get the RRF funding they applied for. But, Daly says they still count themselves as one of the lucky ones. “We have such a strong community here that supports us, that it didn’t affect us so incredibly adversely,” he said.

Expanding While Saving

The reason why the RRF grants are so attractive to restaurant owners is because unlike a loan, you don’t have to pay them back. “The EIDL loan fund and PPP were great, but many restaurants incurred additional debt by taking out loans,” said Chambers.

It’s a debt that restaurants in the process of trying to set themselves up for success in the future, say would only set them back. “It wasn’t so much that we were taking on more debt in that way or as far as taking out loans and things like that. It was just planning to be successful in the future, you see where the red is coming,” said Daly. “They’re razor thin margins. Anything you can do to help pad that line is never going to be a bad thing.”

Uncertain Future

For other restaurants, it’s a different story. “Businesses here on the Shore are telling us it’s the worst economic conditions they’ve seen, even pre-pandemic. It’s not just the worker shortage. It’s inflation, it’s high costs, people are behind on their rent,” said Chambers. “We’ve already seen businesses curtail their hours, shut down on days they would normally be open. That trend is not going the other way unless the RRF is replenished by Congress.”

As the RRF’s future remains uncertain, Chambers says some restaurant owners are now left with the reality that they might have to close their doors for good. “Over 50% of restaurant operators nationwide did not get relief on moneys. The money ran out and went dry. In Maryland, two thirds of the restaurants that applied for RRF funds did not get them,” he said.

Hoping For Swift Action

Senate Bill 2675 is the legislation necessary to replenish the RRF. The bill needs 60 votes to pass, but Chambers says they’re a few votes short right now. He says if the bill isn’t passed, many businesses might be forced to shut their doors for good. “Almost 100% who did receive the grant say that kept them in business,” said Chambers.

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