MA Restaurants Face Uncertain Future As SBA Ends COVID Relief

MASSACHUSETTS — Hundreds of Massachusetts restaurants are facing an uncertain future after the U.S. Small Business Administration said Wednesday it is shutting down the Restaurant Revitalization Fund passed by Congress as part of the coronavirus relief package.

In an email to applicants Wednesday night, SBA said the program will be "disabled" July 14. At that time, it will stop accepting applications. To date, the program has handed out grants to 105,000 restaurants, but another 265,000 applicants are still waiting. A bill to replenish the fund has been introduced in Congress, but it has not moved forward.

"There are thousands of operators in Massachusetts that dutifully applied for the Restaurant Revitalization Fund on the first day that it was opened. Without Congressional action to replenish the fund, restaurants across Massachusetts will face an uncertain future," said Steve Clark of the Massachusetts Restaurant Association. "Many are in the ironic position of seeing increased diners but are taking in less revenue as they battle with continuously rising food prices and lack of labor and staffing issues to fully reopen."

Despite restaurant industry lobbying for Congress to replenish the fund, lawmakers have been more focused on reaching a compromise on the Biden administration's infrastructure improvement bill.

"It is a particular gut-punch for those operators that received a funding notice a few weeks ago, only to get a funding rejection letter last week," Clark said. "We need Congress to act on the RRF Replenishment Act to provide the SBA with the funds they need to complete this important mission."

Restaurants can continue to apply until June 14. SBA said it will keep applications on file in case the fund is replenished. A federal court ruling in May forced SBA to halt payments to 2,965 business owners who had already been approved for loans under the Restaurant Revitalization Fund.

The lawsuits filed by plaintiffs in Texas and Tennessee argued the 21-day prioritization period of women and socially or economically disadvantaged applicants was discriminatory. A Sixth Circuit court panel ruled the provision was unconstitutional on May 28. The SBA notified affected business owners about the court's decision the following weekend.