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Uncertainty Over New Business Aid as COVID-19 Disrupts Operations Anew

  • Bipartisan effort in Congress reportedly seeking to restore a COVID-19 relief program for restaurants, with the potential for additional aid to hard-hit businesses
  • COVID-19 continues to be disruptive to businesses with spikes in infections caused by two variants
  • Some officials are skeptical about offering further business relief amid strong economic factors

Summary by Dirk Langeveld

Nearly two years after the start of the COVID-19 pandemic, the virus continues to disrupt businesses and consumer activities. However, efforts to revive relief programs or introduce new ones are facing an uphill battle.

The federal government’s largest COVID-19 pandemic relief programs, the Paycheck Protection Program and COVID Economic Injury Disaster Loan program, have both stopped taking applications. The U.S. Small Business Administration also oversaw two smaller grant programs targeted at live venues and the restaurant industry.

Funding for the latter program, the Restaurant Revitalization Fund, fell well below demand. The $28.6 billion program offered grants of up to $10 million to support restaurants, bars, and other businesses in the food and beverage industry, which suffered major revenue losses during the pandemic. The Restaurant Revitalization Fund provided support to about 101,000 businesses, but another 177,000 applicants went unfunded.

This situation prompted efforts in Congress to buoy the program with enough money to fund all requests, though these proved unsuccessful. While the introduction of COVID-19 vaccines last year raised hopes that consumer dining habits would soon return to normal, the emergence of the Delta and Omicron variants late last year drove spikes in infections and renewed uncertainty. The National Restaurant Association, which has maintained its call to replenish the Restaurant Revitalization Fund, says the industry is struggling with a “smaller workforce, rising food and payroll prices, increased occupancy costs, and supply chain delays [placing] greater financial strains on restaurants already struggling on thin margins.”

The Washington Post reports that Senators Ben Cardin and Roger Wicker, who spearheaded an unsuccessful effort to add new funds to the Restaurant Revitalization Fund, are seeking to renew this effort using $68 billion in new spending as well as unallocated funds from other programs. The senators are reportedly attempting to attach such legislation to a government funding bill, and the money could also be used to support other businesses that have been disproportionately impacted by the pandemic.

However, proposals to establish more business relief have also attracted skepticism. CNN reported that Cardin and Wicker’s efforts stalled in December, and that discussions on the matter were still in their early stages.

A Biden administration official commenting to CNN also offered a harsh assessment of new business relief funds, aside from the potential for “something small” for restaurants. The official said that with there was little appetite to “bail out businesses if the economy seems strong.”

Some other pieces of legislation introduced in Congress aim to provide targeted relief to hard-hit businesses, including one for the hotel industry and another for the fitness industry. There has also been no movement on these proposals since their referral to committee.

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