Pandemic loan repayments deepen financial strain for US restaurant owners
Original report:
Federal disaster loans helped restaurants survive Covid shutdowns, but owners interviewed by the Guardian described repayments squeezing already weakened businesses. Its October 2026 report detailed mounting debt, closures and risks to personal assets for borrowers who guaranteed their loans.
US restaurant owners faced mounting pressure from pandemic disaster loans as weak sales and higher operating costs undermined repayment, the Guardian reported on 16 October 2026. Citing a congressional report, it said defaults across the Covid economic injury disaster loan programme exceeded 30%, with $75.2bn charged off as of June. Those figures covered businesses broadly, not restaurants alone.
Miami operator Jai Mazumdar borrowed $457,000 across two loans and said he remained current on $1,900 monthly payments despite continuing losses. Virginia brewer and restaurateur Randy Barnette said he stopped paying after hardship assistance ended. Following transfer to Treasury collections, his balance rose from $530,000 to more than $750,000 with interest, penalties and fees.
The financial exposure extended beyond restaurant premises: the report said EIDL borrowing above $200,000 required personal guarantees, putting owners’ assets at risk in default. Independent Restaurant Coalition executive director Erika Polmar said surviving operators without restaurant revitalization grants were left servicing debt rather than reinvesting in their businesses.
Source
the Guardian — 16 October 2026
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