The Restaurant Revitalization Fund (RRF), a critical post-COVID-19 lifeline to help struggling eateries, is now officially depleted.
The Small Business Administration (SBA) received 370,000 applications from foodservice businesses around the country for RRF money. As of June 30, the program had distributed nearly $29 billion to more than 101,000 restaurants, according to SBA’s Restaurant Revitalization Fund report.
However, the online portal that has served as an application hub for the program will close on Wednesday — leaving over 177,000 businesses without funding they need to keep their business afloat.
“We’re still digging ourselves out of the pool from the past year,” said Amanda Cohen, chef and owner of Dirt Candy in New York City. “I still have so much debt and bills that I have to pay off that I’ve just accumulated from pre-pandemic and during the pandemic.”
This news comes on the heels of the SBA sending out letters to previously approved grant applicants, which it had to rescind amid multiple discrimination lawsuits. All of those recipients were women, veteran, and minority-owned businesses.
The SBA, tasked with distributing the relief funds, announced on May 10 that 16,000 businesses were approved for grants totaling $2 billion in the first week. Many business owners spent months waiting for this relief.
But weeks later, with approvals in-hand, these same businesses learned that their “approved” financial lifeline wasn't coming. Over 3,000 businesses received notices indicating that their grant money had been canceled.
Cohen is one of thousands of businesses still waiting. Her application wasn’t rescinded but there was something on the SBA’s part that was delaying her process.
“I got a very clear note saying, we're sorry, we finally fixed the problem on our end, but unfortunately we will not be fulfilling your application as there are no funds left,” Cohen explained.
Meanwhile, thousands of restaurateurs like Cohen are left in limbo. While optimism is on the rise as restaurants welcome indoor diners again, costs associated with supplies and labor are soaring across the board. Wholesale food prices jumped by 0.8% in June, led by higher costs of beef, pork, and chicken — heightening the needs of eateries in desperate need of cash to offset those costs.
“We’re seeing dramatic price increases in all of the supplies a restaurant needs, whether it's ingredients or utilities,” Erika Polmar, executive director of the Independent Restaurant Coalition, said in an interview.
Last month, members of Congress introduced new legislation to refill the SBA’s revitalization fund with an additional $60 billion. The effort dovetailed with growing calls for Congress to help small businesses rebound from the pandemic.
“The headwinds that this industry is facing are immense and the refill of the restaurant revitalization fund could provide them the stability that they need to weather what I anticipate being a fairly long recovery,” Polmar added.
And affected business owners aren’t sure what comes next. It’s unclear if or when that legislation could pass. However, it does have bipartisan support and was introduced by Senator Kyrsten Sinema (D-AZ), Senator Roger Wicker (R-MS), Representative Earl Blumenauer (D-OR), and Representative Brian Fitzpatrick (R-PA).
“Hundreds of thousands of local restaurants still desperately need help to keep their doors open,” a spokesperson for Blumenauer said in a statement recently.
“In less than one month, we’ve secured 190 bipartisan cosponsors, but time is ticking. We need to act now before it’s too late,” the statement read.
Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter: @daniromerotv
More from Dani:
Deloitte: CFOs optimistic, but hiring shortages, inflation, return to work fan economy concerns
Data: LGBTQ buyers opt for cheaper homes that need ‘TLC’ over pricier digs
No solution in sight as renters, landlords face ‘eviction cliff’ on June 30
SBA's shuttered venue cash off to slow start as 'nervous, worried' businesses await backstop
Read the latest financial and business news from Yahoo Finance
Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, YouTube, and reddit