RALEIGH, N.C. (WNCN) — Only about 40 percent of the North Carolina restaurants that applied for money from a federal program designed to help them actually received any before it ran out of money.
Roughly 6,600 eateries across the state sought a total of $1.6 billion from the Restaurant Revitalization Fund, said Lynn Minges, the president and CEO of the North Carolina Restaurant and Lodging Association.
But funds totaling $645 million went to just over 2,500 of the state’s restaurants before the program was challenged by a lawsuit and eventually exhausted its funds.
“There’s just not enough money,” Minges said.
Under the $28.6 billion program, which was was part of the Biden administration’s $1.9 trillion relief package, restaurants and bars could qualify for grants up to $10 million per business and $5 million per location to match the losses they suffered due to the pandemic.
The average grant in North Carolina was $251,000, and 40 percent of the money distributed in the state went to just 6 percent of the recipients.
The vast majority — more than $557 million — of the funds did not have a specific franchise attached to it. Of the ones that did, Golden Corrals were the top recipients with a total of more than $37 million.
Two of them — in Huntersville and Winston-Salem — each received the maximum of $10 million.
The smallest grant — $1,047.28 — went to a self-employed food truck operator in Charlotte.
For the businesses that did receive money, the program was a success, Minges said.
There just weren’t enough of them.
“This fund provided immediate relief to those restaurants that received it,” Minges said. “It’s been a great program for those that have received the funds. What we’re concerned about now are those that did apply and are eligible, but just there’s not enough money to go around.”
Priority for the program was given to restaurants and bars owned by women and minorities.
But about 3,000 of them across the country — including Kim Hammer, who owns a dessert shop and bar in Raleigh — wound up having their payments rescinded.
Hammer said she was approved for a six-figure grant that she was going to use to hire more employees at Bittersweet in downtown Raleigh.
Then came a notification that she referred to as “the death email.”
It said her grant was not coming, after three white business owners sued the Small Business Administration in Texas and Tennessee. They said they were discriminated against because the program gave priority status to other groups.
A federal judge in Texas issued an injunction in May preventing the agency from handing out any money to priority applicants — like Hammer — who had been approved but had yet to receive anything. But the SBA could distribute money to applicants who were not prioritized.
The SBA then closed the fund in late June after it ran out of money.
“It felt like it took to another level, that this was just abuse at this point,” Hammer said.
In North Carolina, about a third of the loans went to businesses owned by women. A third of recipients reported being socially or economically disadvantaged. And 21 percent had low to moderate incomes.
“They should all be higher,” Minges said. “There’s just so many people out there hurting.”
Minges says her organization is pushing Congress for another $60 billion in funding. She says lawmakers could reallocate some federal funds that had been tagged for other relief projects.
“They’re unused in other areas. And there may be a way that they can reallocate those funds,” Minges said. “And that would be an immediate way that they could get money into the fund without having to allocate allocate or appropriate additional revenue.”