More than two years after the Covid-19 pandemic they forced restaurants across the country to close, and after reopening with restrictions, independent establishments are still struggling to make ends meet.
While their establishments may seem busy at times, with crowded outdoor courtyards, the aftermath of the early stages of the pandemic continues to threaten the chances of survival of independent bar and restaurant owners, according to a new report from a group of restaurants. independent.
Federal aid programs that provide aid in the form of grants and loans have been shown to be insufficient to keep many establishments afloat in an industry that was already known for its tight profit margins.
The $ 28.6 billion restaurant revitalization fund (RRF)a grant program that was part of the U.S. Rescue Plan has boosted those applicants who managed to receive funding.
But only one in three program applicants received money. For those who did not receive grants, the outlook is bleak, according to the Independent Restaurant Coalition (IRC), a grassroots organization made up of chefs and independent restaurant owners to ensure protections for the industry.
“The data tells us what we’ve been hearing about restaurants for more than two years: Thousands of businesses will close if the Senate doesn’t replenish the Restaurant Revitalization Fund,” Erika Polmar, IRC’s executive director, said in a statement Thursday. . “After two years of lost rental payments, suppliers and utilities, navigating the astronomical costs of food and multiple increases in COVID-19 that slowed down businesses, independent restaurants and bars lack the time, options and money,” he said. dir Polmar.
Closures to the horizon
The new survey data shows this. According to an IRC survey, more than half – 52% – of independent restaurants and bars that did not receive RRF subsidies predict that they will have to close in six months. This compares to 24% of companies that got funding but still say they may not get it another year.
In particular, homeowners who did not receive grants say they are at greater risk of defaulting on loans, having to file for bankruptcy, or being evicted by their homeowners.
The IRC and restaurateurs across the country expect the Relief Act for hard-hit restaurants and other small businesses, passed in the House of Representatives last week, to also be approved by the Senate and allocate an additional $ 42 billion to the RRF.
An independent law has been introduced in the Senate, the COVID-19 Small Business Relief Act of 2022, which would add $ 40 billion to the RRF.
One of the lucky ones
Cheetie Kumar, owner of Garland, a restaurant and music venue in Raleigh, North Carolina, is considered fortunate to have received an RRF grant. Grant amounts are determined by calculating the difference between a company’s revenue in 2020 and its revenue in 2019, minus the value of the Paycheck Protection Program loans it has received.
Kumar said he has not had a solid quarter since the start of the pandemic and without the funds, his restaurant would not currently exist.
“About three months in a row they’ve had the same revenue as before. We’re going to have two fantastic months or 6 fantastic weeks, but that’s all,” he told CBS MoneyWatch.
“When [COVID] the cases increase, we see hesitations on the part of the diners, which occur in the number of reservations we obtain. When there is an increase, people do not want to come to eat at restaurants. And our menu and kitchen are not designed to take away, “he said.
“A fight for us”
Kumar must also make the money last, given the boom in coronavirus variant BA.2 and the uncertainty ahead.
“We will have to keep the money for at least another year, if not longer. If we didn’t have that money we would be so far from the water that it would be impossible to open it and get out of it with a massive personal debt.” she said.
While Kumar is not eligible for a second RRF fund, he advocates replacing the RRF to save his industry. He said he knows all too well how difficult it is to have a profitable restaurant and doesn’t think it’s fair for some of his neighbors to stay tall and dry.
“I’m not asking for my own business; we’re going to find a way to survive because we’ve received the grant. But that’s a struggle for us, it’s for our industry to survive,” he said. “If I’m the only person in our community in the center who survives this, it’s not much of a community.”
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