What happened to the Restaurant Revitalization Fund?

The Independent Restaurant Coalition has filed a request under the Freedom of Information Act, demanding to know how the Small Business Administration distributed billions of dollars that were earmarked for restaurants, bars, caterers and other food-based businesses.

The $28.6 billion, which was supposed to provide emergency assistance to these organizations, was promised, and in many cases delivered. But support was cut off after a round of discrimination lawsuits halted the program.

The IRC, SBA, and RRF Cash: A Timeline

March, 2021: American Rescue Plan Passes Congress, Signed into Law

The Restaurant Revitalization Fund (RRF) was part of the larger American Rescue Plan, which provided an assortment of supporting benefits to businesses and individuals. The RRF was part of this legislation, which was signed into law by President Joe Biden.

Early June, 2021:

Initially, the RRF appeared to be running smoothly, with numerous businesses receiving money or approval through the program. But in June, multiple lawsuits against the program emerged as more and more individuals and businesses claimed discrimination. At issue was the program’s 21-day launch period that prioritized certain individuals, notably women, minorities, and veterans. Numerous businesses filed discrimination suits against the program, largely claiming that prioritizing one group over another on the basis of race or sex, is unconstitutional.

Following the stream of lawsuits, the SBA released cancellation letters to restaurants and business owners who had previously been approved for funding. The SBA, it appeared, decided to halt funding until the legal issues were settled.

Early July, 2021

But then something happened, something that is still unclear. The SBA simply announced that they were closing the Restaurant Revitalization Program. In early June, the SBA said that they would close the Restaurant Revitalization Fund and no longer take applications for the program. Businesses who had applied  but not received funding would go back into the queue if Congress were to create another round for the RRF.

 A letter from the Small Business Administration to pending applicants said that there was “overwhelming demand” and the program simply could not fund all qualified applicants. Essentially, there were too many restaurants, bars, and caterers seeking the limited funds. The letter stated that the SBA could only fund about 105,000 out of roughly 370,000 applications.

 The SBA announced they would close the RRF on July 14th, which has come and gone.

July 8th, 2021: IRC Demands Answers, Requests Refill

Now the Independent Restaurant Coalition (IRC) is demanding information from the SBA on how the money was distributed. With a formal request through the Freedom of Information Act, they have demanded data on various points, including: 

•   Zip codes of applicants

•   Date and time of applications, processing, approval, communication, and payouts

•   Amount of funds paid to applicants

The IRC also requested information on whether the applicant business was a priority, and whether or not the lawsuits impacted how the SBA processed applications. They also want to know how many businesses had their applications initially approved and then received cancellation letters.

The IRC did not just demand information; they also made a formal plea for action by the federal government. Specifically, they called for Congress to replenish the RRF funding so that struggling restaurants can get the support they still need.

What’s Next for the RRF?

 For obvious reasons, restaurant and food-based businesses want to know what’s next for the RRF. Unfortunately, little is known at this time.

 In both chambers of the U.S. Congress, a bi-partizan bill was created that would provide another $60 billion for RRF funding. Called the Restaurant Revitalization Fund Replenishment Act, the potential law is gaining momentum, with 181 Representatives and 13 Senators supporting the bill. (As of IRC’s press release.) However ,it’s not known whether this bill could be voted on before Congress goes into recess in August.

 If the replenishment were to occur, it’s unclear how the applications would be processed. Would there be another priority period for minorities and women? Would all applicants be treated the same regardless of race or sex? The outcome of pending lawsuits will likely determine the answers to these important questions.

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