Restaurants Just Got Terrible News About COVID-19 Financial Help
While fast food has been thriving during the pandemic, smaller restaurants have struggled to stay afloat. More than 110,000 restaurants shut their doors for a limited time or for good in 2020 alone, says Fortune, and many have closed permanently in the years since. For some of these businesses, the federal Restaurant Revitalization Fund created in 2021 was a light at the end of the tunnel. However, even more than a year into the pandemic, many eligible restaurants still hadn't received Covid relief money from the government.
That rings true today. A survey conducted by the Independent Restaurant Coalition found that, in March of 2022, about 52% of restaurants that had not received federal relief funds expected to close within six months. Despite the efforts of individuals like Guy Fieri and Elizabeth Warren, who respectively donated and advocated for additional funding, progress has been slow. Things appeared to be looking up in April when the restaurant industry got a big win from Washington, D.C., as the House of Representatives approved a $42 billion allocation to the relief fund. Unfortunately for restaurateurs expecting good news, the Senate reached its own decision last week and voted against the assistance program.
The Senate shuts down additional financial assistance for restaurants
On May 19, the U.S. Senate officially voted down the latest Small Business COVID Relief Act. According to Eater, the act failed 52 to 43, essentially signing the death warrants of more than 175,000 struggling restaurants, the Independent Restaurant Coalition fears.
Senators who voted against the bill said that approving the funds would have only added to the current inflation problems by "spending more money we don't have," per ABC-affiliate WCPO 9 News. There's no doubt that the food inflation crisis is concerning, as families are struggling to afford groceries and other essentials, on top of the baby formula shortage and other depleted supplies. However, voting down the relief act also means more restaurants closing and millions of people losing their jobs, critics say. Additionally, as noted by Restaurant Business, many of these restaurants "racked up a tremendous amount of debt" in trying to remain open while waiting for federal aid.