Small businesses left without federal funds after court order

Nearly 3,000 businesses were promised money from the Restaurant Revitalization Fund, but a federal agency had to cancel payments.
Updated: Jun. 18, 2021 at 10:21 PM CDT
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MADISON, Wis. (WMTV) - Almost 3,000 small business owners are facing the rollback of federal money they were promised under the Restaurant Revitalization Fund. Less than three weeks ago, the U.S. Small Business Administration (SBA) stopped distributing money from the fund, leaving some business owners hanging.

The Restaurant Revitalization Fund was a $28.6 billion program created by the latest COVID-19 relief bill, intended to help cover the loss of revenue for restaurants, caterers and other food and drink related businesses.

“We know that restaurants and hospitality in general have been outsized impacted by the pandemic,” said Greater Madison Chamber of Commerce president Zach Brandon. He added, “That’s not just a storefront, that’s a livelihood.”

The fund prioritized businesses owned by women, veterans and socially disadvantaged groups. However, some business owners filed lawsuits alleging discrimination and federal courts issued an injunction, forcing the SBA to cancel payments the agency had already promised to close to 3,000 businesses and stop prioritizing.

“The inability for them to be able to be at the front of the line for this piece of the recovery is a bad economic decision,” Brandon said.

Brandon added this decision could slow economic recovery. He worried businesses could close their doors, costing jobs.

“Businesses owned by people of color, by women, by veterans, disproportionately employ that demographic as well,” he explained.

Many federal relief programs are also running out of money, including the Restaurant Revitalization Fund, leaving fewer resources for businesses still struggling.

“The question is just how fast are we going to recover and who’s going to get left behind in the recovery,” Brandon said.

When asked what resources are available for those who were expecting money from the Restaurant Revitalization Fund, Brandon recommended business owners look into the Economic Injury Disaster Loan program, also run by the SBA. The EIDL program is a federal loan to help cover normal operating expenses and financial obligations.

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