BOSTON (WHDH) - More than 100,000 bars and restaurants across the U.S. have closed since the start of the pandemic. Many others struggled to stay open and were promised government money to help. But they never got that money! Hank Phillippi Ryan Investigates.
The door at District 7 Tavern has been closed since the beginning of the pandemic.
Inside, the bar sits empty. The pool table is covered. The TVs and jukebox are off.
“It’s been a struggle to keep the lights on,” co-owner Arianne Waldron says. “We are in debt. We are drowning.” The Roxbury pub is struggling to find the money to reopen.
“The bills are piling up in a very kind of overwhelming way,” Arianne says, “Like how will we ever get out of this?”
Earlier this year she and her business partner applied for grant money from the federal “Restaurant Revitalization Fund.”
The fund had $28 billion that Congress set aside to help businesses like Arianne’s that were hit hard by COVID.
“It felt like, OK, this is going to be our lifeline,” Arianne says.
District 7 got an email from the Small Business Administration with good news: “Congratulations, Award Approved.”
“We were ecstatic,” Arianne says.
The email promised a $100,000 grant would be in the restaurant’s bank account in “3-7 business days.”
“This money was going to save us. This money was going to enable us to reopen, to enable us to hire back our workers, and for them to be able to provide for their families,” Arianne says.
Arianne and her partner used the email — and the promise of that money – to get a bank loan.
They began repairs, bought employee uniforms, and hired back their manager.
But two weeks later, they got another email that said:
“We regret to inform you that due to recent court rulings the U.S. Small Business Administration will not be able to disburse your Restaurant Revitalization Fund award.”
“I immediately felt sick to my stomach,” Arianne says.
We found the same shocking notice went out to nearly 3,000 bars and restaurants across the country. The money they were promised wasn’t coming!
“Their immediate reaction was terror, desperation, heartbreak, confusion,” Erika Polmar, the co-founder and executive director of the Independent Restaurant Coalition says.
What happened? When Congress created the fund, lawmakers gave priority to applications from businesses owned by women, veterans, or socially and economically disadvantaged people.
But then some businesses filed federal lawsuits challenging that. And judges agreed with them.
“It’s particularly devastating when you believe you have the award and it’s taken away,” Erika says.
The Independent Restaurant Coalition was flooded with calls from business owners who also already spent the cash they were promised.
“I spoke to folks that were justifiably hysterical. I have never before in this role called in crisis counselors while on the phone with people, it was that dire and it still is,” Erika says.
The fund then had to reconsider all outstanding applications on a first-come, first-serve basis and it quickly ran out of money!
We found only 36% of the businesses that asked for money were eventually approved.
And now more than a hundred thousand restaurants and bars – including District 7 – are still waiting for help.
“This sudden yanking of this rug out from under us has really left us in the lurch,” Arianne says.
There are bills in Congress right now calling to give more money to restaurants and bars to stay afloat. Industry experts tell 7-Investigates if something isn’t done soon more businesses will close and more people will lose their jobs.
FOR MORE INFORMATION:
Here are links to some of the bills pending in Congress to replenish the fund and other legislation to help restaurants, bars, and other food and beverage businesses:
The Small Business Administration (SBA) tells 7 Investigates:
As of June 30, 2021, the RRF program received more than 278,000 submitted eligible applications representing over $72.2 billion in requested funds, and approximately 101,000 applicants have been approved to restaurants, bars, and other restaurant-type businesses.
Underserved populations received approximately $18 billion in grant awards including:
- Women-Owned businesses ~ $7.5 billion
- Veteran-Owned businesses ~ $1 billion
- Social and economically disadvantaged-Owned businesses ~ $6.7 billion
- Businesses Owned by Representatives of Multiple Underserved Populations ~ $2.8 billion
The remainder of the $28.6 billion was awarded to eligible applicants not identified as part of an underserved group.
Additional economic relief is available: The SBA is still administering programs such as the Economic Injury Disaster Loans [EIDL], Targeted Advance EIDL, and Supplemental Targeted Advance EIDL programs. SBA Administrator Guzman increased the maximum amount that small businesses can borrow through the EIDL program.
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