Restaurant industry calls on Congress to replenish Restaurant Revitalization Fund

SALISBURY, Md. — The restaurant industry is appealing to Congress for help, hoping for more emergency funding.

Appeal to Congress

The money in question is the Small Business Administration’s (SBA) $28.6 billion Restaurant Revitalization Fund (RRF). “The RRF was supposed to help restaurants offset some of those costs to ensure they could continue to operate, continue to keep people employed, and continue to serve their communities in which they are located,” the chairman of the board said. Salisbury Area Chamber of Commerce Bill Chambers.

While state-level help has proven helpful, Chambers says he doubts more help from Annapolis is coming anytime soon. “I don’t believe the General Assembly will adjust the Governor’s budget to propose a new restaurant subsidy program. So it’s really up to Congress right now to do that,” he said.

The fund dries up quickly

When the SBA announced the grants last year, restaurants across the country rushed to apply. But those funds quickly dried up. Single pitches were eligible for up to $5 million. Businesses with fewer than 20 locations were eligible for $10 million. Publicly listed companies were not eligible, but their franchisees could still apply.

Mogan’s Oyster House was one of those restaurants hoping to get their share. “Everyone who’s still here, who’s been lucky enough to carry on, has taken on more and more debt, just to make it to the other side,” said Mike Daly, general manager of Mogan’s Oyster House. “Any hospitality-oriented service has taken a huge hit this year.”

Mogan’s did not obtain the requested RRF funding. But, Daly says they still consider themselves one of the lucky ones. “We have such a strong community here supporting us, that it hasn’t affected us so incredibly negatively,” he said.

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The reason RRF grants are so attractive to restaurateurs is that, unlike a loan, you don’t have to repay them. “The EIDL Loan Fund and PPP were great, but many restaurants took on additional debt by taking out loans,” Chambers said.

It’s a debt that restaurants trying to prepare for success in the future say will only set them back. “It wasn’t so much that we got into debt that way or that we took out loans and things like that. I was just planning to be successful in the future, you see where the red comes in,” Daly said. “These are very thin margins. Anything you can do to help fill that line will never be a bad thing.

Uncertain future

For other restaurants, it’s a different story. “Businesses here on the shore are telling us these are the worst economic conditions they have seen, even before the pandemic. It’s not just the labor shortage. It’s inflation, high costs, people are behind on their rent,” Chambers said. “We have already seen businesses reduce their opening hours, close on days when they would normally be open. This trend does not go the other way unless the RRF is reconstituted by Congress.

While the future of RRF remains uncertain, Chambers says some restaurateurs are now finding themselves with the reality that they may have to close their doors permanently. “More than 50% of restaurateurs nationwide have not received financial relief. The money ran out and dried up. In Maryland, two-thirds of restaurants that applied for RRF funds did not get them,” he said.

Hoping for quick action

Senate Bill 2675 is the legislation needed to reconstitute the RRF. The bill needs 60 votes to pass, but Chambers says they’re a few votes short of them right now. He says that if the bill does not pass, many businesses could be forced to close permanently. “Almost 100% of people who received the grant say it kept them in business,” Chambers said.


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Cecil N. Messick