, Wis. — The American Rescue Plan
included a $28.6 billion lifeline for restaurants
, but owners are already concerned that the funds will run out before they can receive any assistance.
Becky Cooper-Clancy, the owner of Bounce MILWAUKEE, opened a party space
with laser tag, rock climbing, ax throwing, arcades, bounce houses, and a restaurant and bar in 2014. Think Chuck E. Cheese, but locally owned, with a community justice mission and fun for kids and adults.
The company made more than $1 million in 2019; last year, it barely made $200,000 by attempting a takeout pizza and parking lot drive-in movie business. It has been completely closed since August, with the building being donated to a mutual aid organization.
Cooper-Clancy was able to get around $150,000 from the Paycheck Protection Program
, and she took out an Economic Injury Disaster Relief Loan. She and her husband stopped paying for their personal medical insurance to save a couple hundred dollars per month, but the bank account has run dry, and she is now twice as in debt as she was when she opened the business.
Cooper-Clancy found herself refreshing the Small Business Administration
's website page to submit her application on the day the Restaurant Revitalization Fund was launched last week.
“If we are approved for the Restaurant Revitalization Fund, I believe we will be OK and will make it through; if we are not approved, because it is severely underfunded, I believe we have just delayed the inevitable,” Cooper-Clancy said.
The Restaurant Revitalization Fund, which is part of the American Rescue Plan signed into law by President Joe Biden
in March, reimburses restaurants for lost revenue during the pandemic
up to $10 million (or $5 million per physical location). Businesses do not have to repay the funds as long as they use them before 2023. Women- and minority-owned businesses are prioritized for the funds in the first 21 days.
The Biden administration
announced within the first three days that the program had received more than 180,000 applications, and the SBA had approved more than 16,000 businesses for funding by this week.
Already, restaurants are warning that there will be insufficient funds, and the administration appears to be aware that demand will outstrip supply.
If we get the Restaurant Revitalization Fund, I think we'll be fine; if we don't, because it's severely underfunded, I think we've just postponed the inevitable.
MILWAUKEE entrepreneur Becky Cooper-Clancy
Patrick Kelley, who runs the SBA's Office of Capital Access, stated in a webinar with the U.S. Black Chambers about the funding that there "is probably not going to be enough funds, in all likelihood, for the demand that's out there."
“Please apply so that we can send a strong statement to Congress
and the administration that there is demand, and hopefully we will act as a country, as we did last year, to provide additional funds,” Kelley told the participants.
The fund was created to correct course following the bungled implementation of the Paycheck Protection Program, the forgivable business loans passed under the CARES Act last year. The government has given out more than $780 billion under the PPP program to date; the most recent extension of the program under Biden has already run out of money
Small businesses, particularly restaurant owners, are quick to point out flaws in the PPP program. The rapid rollout left many banks in the dark, unable to assist clients. The rules governing the loans kept changing. And many businesses were unable to access the program, disproportionately leaving minority- and women-owned businesses behind.
Even those who were successful in obtaining PPP funds admit that it was a difficult process.
“We simply needed direct aid much sooner, and it was really difficult to stay afloat in that way with so much uncertainty and chaos,” Cooper-Clancy explained. “The first PPP loan, I think I spent three or four full days trying to get the information I needed and get it through our bank, and no one had any answers.”
Part of the battle now is to make sure restaurant owners are aware of the new fund.
A.J. Dixon, chef and owner of MILWAUKEE restaurant Lazy Susan MKE, has taken it upon herself to educate local business owners, hosting webinars on the Restaurant Revitalization Fund for women and Black-owned businesses.
had stay-at-home orders, Dixon told her employees to apply for unemployment
insurance as soon as possible in case she had to close down. Now, her message to Congress is that this can't be the last lifeline, and that restaurants are digging themselves out of a deeper hole than expected because relief came so late.
“This is going to be a slow process,” Dixon predicted. “It’s not going to be a case of everyone opening their doors again and everything will be fine; there will still be people
who are hesitant to go out, and that is affecting the economy
“A lot of people in this industry live paycheck to paycheck, and the amount of disregard to help us sooner was bullshit, and that goes for both parties,” Dixon said, adding, “There’s no reason why this should have taken that long.”
The Restaurant Revitalization Fund has been popular with both Republicans
, despite the fact that every Republican in Congress voted against the rescue package that included the money. This inconvenient fact hasn't stopped Republicans from touting it and encouraging their constituents to apply, allowing them to appear to be helping restaurants in their districts get much-needed funding.
But the urgency of passing more COVID-19
relief has faded in Congress. Democrats are fixated on the president's infrastructure
proposal, while Republicans have advocated for cutting off additional federal unemployment insurance. There has been little bipartisan appetite to add more money to the PPP program, which has already run dry, let alone consider additional targeted relief.
A lot of people in this industry live paycheck to paycheck, and the lack of willingness to assist us sooner was a sham, on both sides' counts.
MILWAUKEE Restaurant Owner A.J. Dixon
It's a reality that worries restaurant owners who are hopeful but realistic that this summer will not bring in the same revenue as previous years. "Running a business is more expensive now," said Melissa Buchholz, co-owner of MILWAUKEE restaurant Odd Duck.
“A lot of us, restaurants, lose money in the winter, and we rely on the summer to get us through the winter,” Buchholz said. “Well, this summer, it’s going to be better than before, but it’s going to be like an old winter, so if operating at full capacity is our slowest month, it’s hard to imagine how the business survives with double the debt.
is more expensive, transportation costs have increased, and supply chain disruptions have increased her costs across the board, according to Buchholz, who owns 50% of the business. Buchholz will have to wait the first 21 days of the Restaurant Revitalization Fund before she is eligible for funds.
There is a palpable sense of exhaustion; she, like many other small business owners, has been reinventing the wheel for the past 14 months in order to keep the business running and as many employees employed as possible. She has done takeout, take-home party boxes, and farmers market baskets.
“I’m paying for a whole retraining of a staff that I normally wouldn’t have to do; those are huge costs,” Buchholz explained, noting that “restaurants typically make single-digit profit margins.”
Sen. Tammy Baldwin (D-Wis.), who spent the weekend touring Madison, Wisconsin, restaurants attempting to stay open during the pandemic, refused to commit to supporting additional funding for the program in any upcoming bills, but said she was keeping an eye on progress.
“It’s unclear what legislation bill will be used to continue to look at small business assistance,” Baldwin said, adding that she hopes some state and local funding can also be directed toward small business relief. “The record shows we have adapted and adapted and added more funds, and [adding more funds] is certainly a possibility,” Baldwin said.
For the time being, restaurants must simply wait to see if they are chosen.
Caleb Nicholes, co-owner of a Madison coffee shop, said, "It feels like a crapshoot."