Within a span of three weeks, requests for the Restaurant Revitalization Fund have exceeded the $28.6 billion allocated for the program.
“If our nation’s food and beverage industry is going to fully recover, we must ensure as many of the hardest-hit businesses get the economic aid they need,” Small Business Administration Administrator Isabella Castillas Guzman said in a press release Tuesday. “…The SBA will continue to be as entrepreneurial as the small businesses we serve.”
As of Tuesday, the RRF program received over 303,000 applications requesting more than $69 billion in funds. Roughly 38,000 applications have been approved for more than $6 billion from the pool of restaurants that have already applied. The application portal will be closed on May 24.
Connecticut’s individualized data on applicants and recipients of the grants has not been publicly released, Connecticut Restaurant Association Executive Director Scott Dolch said last week.
Dolch also emphasized that the high number of applicants and demand for the funding establishes a sense of worry that not all restaurants will receive direct relief.
“At the end of the day, I am very concerned as the head of the association,” Dolch said. “Some restaurants will get dollars if they are eligible, but some restaurants will get nothing if we can’t replenish this fund beyond the $28.6.”
Within the first two weeks of the program, SBA received 12,898 applications from businesses with not more than $50,000 in pre-pandemic funds that requested a total of $290 million in funds. However, the program also received 73,671 applications from businesses with not more than $500,000 in annual pre-pandemic revenue that requests in $6.1 billion in funds, and 34,010 applications from businesses with $500,000-$1,500,000 in annual pre-pandemic revenue that request $8.4 billion in total funds.
In response, Guzman established two additional allocations to ensure unbiased and even distribution of the funding to smaller restaurants and eating establishments.
This is determined by examining applicants’ 2019 gross receipts: deciphering that applicants with not more than $50,000 will get $500 million, and applicants that received between $500,000 and $1,500,000 will get $4 billion.
“The numbers speak to the commitment SBA made to educating owners and operators through their work with the Association, our state partners, and other industry support organizations,” President & CEO of the National Restaurant Association Tom Bené said in the press release. “The funds that have already been distributed will help accelerate the recovery of thousands of restaurants and bring much-needed capital to communities across the country.”
However, pre-pandemic revenue is not the only determining factor behind prioritizing applicants.
The program’s model was built to focus on establishments owned by women, veterans, minorities and socially and economically disadvantaged individuals. Dolch said that although a large number of applicants fit the criteria in the country, Connecticut’s demographics might be the reason behind restaurants’ lack of funding.
“We have done our part to get as many applicants,” Dolch said. “But, we might be unfortunately disadvantaged as a state if we don’t have as many business owners in those categories compared to other states because they have a priority.”
Out of the pool of applicants, 57 percent fell under the prioritized category. During the first two weeks of the program, SBA received more than 122,000 applications from women owners, more than 14,000 from veterans and more than 71,000 from economically and socially disadvantaged individuals.
Despite being a part of a priority group, some business owners didn’t quite qualify for the relief that their restaurant needed after COVID-19.
Owner of Southwest Cafe in Ridgefield Barbara Nevins said although her business was able to survive solely off of takeout, not being able to even apply for the fund put her at a huge personal disadvantage.
“I have had to redo my bar to allow for a takeout section so people can specifically go there to pick up their food,” Nevins said. “It would have really helped to have something because we still had to change significantly. It cost me a lot of money to put up the plexi glass, less tabling in house and to redo the bar in order to make it appropriate for takeout.”
On the other end, restaurant owners who were able to receive any type of funding are just grateful they were able to get some help.
“As help started coming in from the government from PPP or other grants, that helped out tremendously,” said Nigel Clark, owner of Juiced Up Juice Bar in Hartford. “Trying to sustain employees as well as trying to keep doors open with a tremendous reduction of foot traffic, it really helped to ease the burden.”
Clark explained that the criteria behind applying for the RRF were so difficult that he is unsure about the exact funding his establishment may receive.
“Just trying to get the loan was a hurdle,” Clark said. “These were hours upon hours of phone calls, follow up phone calls and paperwork submissions, I couldn’t possibly do it by myself. I applaud anyone who not only ran a business, but tried to apply for these loans because they were not easy to apply for.”
On the other end, other businesses felt that applying for the diminishing fund would pose a burden for their restaurant moving forward, especially given the odds of receiving relief.
James Green, owner of Papa’s Wings & Seafood in East Haven, said that the business was still affected by the pandemic despite being structured as a takeout establishment. However, Green said he was weary of applying for the fund due to personal concerns of being a small and local business.
“One thing people fail to understand is that as a small business and not a part of a corporation, they always want you to sign a dotted line,” Green said. “You’re fighting for your own personal reasons and now you all of a sudden have this credit debt on your back.”
Green said he would not apply for the grant moving forward despite it being a helpful tool for many other restaurants.
“At the end of the day, if the business does not work like it should work, I don’t want all of this outstanding debt that really wasn’t for me and was for the business,” Green said.
Eligible establishments that meet the application standards are encouraged to continue to apply for the funding until the portal closes next week and should visit the online award portal.
Until then, the association is trying to help as many businesses as it can.
“I’m hoping that the next few weeks brings good news,” Dolch said. “But at the same time, I also know that there are probably well over 150,000 applicants across the country that right now without any additional funding will not receive a thing.”