Why Congress Should Expand COVID-19 Relief to Small Retailers

The retail and restaurant industries were two of the hardest-hit sectors of the economy by the COVID-19 pandemic. Small retailers and restaurants alike were deemed “nonessential” and faced government-mandated closures and restrictions on operations, which led to substantial revenue losses.

Congress created several loan and grant programs through COVID-19 relief legislation like the CARES Act and the American Rescue Plan. One grant program, the Restaurant Revitalization Fund, gives direct aid to struggling small business restaurants through grants. The RRF provides restaurants with funding equal to their pandemic-related revenue losses up to $10 million per business; recipients are not required to repay the funding.

Retail closures mirrored those experienced by restaurants, according to an economic report from Yelp. Unfortunately, small retailers did not receive the same type of direct grant support.

Right now, small retailers are continuing to face challenges that slow their economic recovery including rising inflation, supply chain backlogs and labor shortages. Fortunately, Congress can help. Discussions are underway in Washington about replenishing the RRF, and NRF is advocating to expand the eligible pool of recipients to include small retailers that have experienced similar challenges as restaurants.

Here are three reasons why Congress should expand grant funding eligibility through the Restaurant Revitalization Fund to small retailers.

1. Economic Ripple Effects Have Slowed Recovery for Small Retailers

Compounding pandemic-related challenges such as the supply chain crisis, labor shortages and inflation continue to slow the recovery for small retailers. Danny Reynolds, owner of bridal and women’s clothing boutique Stephenson’s of Elkhart, was starting to see an uptick in business as weddings and events began to resume in 2021, only to be confronted with supply challenges and increased costs.

“Supply chain constraints and rising costs are making it difficult to get in-demand merchandise to our customers,” Reynolds says. “Making small retailers like me eligible to receive a Restaurant Revitalization Fund grant would be greatly useful in maintaining our business until conditions stabilize.”

2. Loan Programs Only Covered a Fraction of Early Losses

Congress provided much-needed aid to small retailers through the CARES Act. This pandemic response legislation included loan programs such as the Paycheck Protection Program and Economic Injury Disaster Loans, as well as tax relief assistance like the Employee Retention Tax Credit to help keep employees on payroll.

While these programs provided some relief to small retailers, the loans only covered a fraction of their revenue losses. “My business is directly tied to the travel industry and sales suffered greatly,” says Tiffany Williams, owner of the Luggage Shop of Lubbock. “I’m incredibly thankful for the help we received through the PPP loans, but they covered such a small portion of our losses in 2020 and 2021,” she says.

3. Some Small Retailers Were Left Behind by Loan Programs

Morgan Harris, owner of Green Bambino, was narrowly excluded from taking advantage of some of these programs. “My team and I worked so hard to serve our customers and keep revenue flowing, but we worked just a little too hard,” she said. “We missed qualifying for PPP2 and the ERTC by less than 2 percent.”

Debt-free going into the pandemic, Harris must now repay a $150,000 EIDL loan, equivalent to a second mortgage for her.

“I did what the government wanted — I kept people employed and contributed to economic activity. I should be eligible for grant funding, just like the restaurants on my street,” she said.

To join the NRF in asking Congress to continue funding the Restaurant Revitalization Fund and expanding eligibility to small retailers, visit the link here.

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