More than 370,000 restaurants applied for more than $75 billion in funding from the Restaurant Revitalization Fund, nearly three times what the program had available. Around 105,000 businesses were approved for grants, which averaged just over $272,000.
The Small Business Administration, which runs the Restaurant Revitalization Fund, told unsuccessful applicants in an email that it was unable to fund all qualified applications because of “overwhelming demand.”
The restaurant fund, which opened in May, started off smoothly but was mired in turmoil in its final weeks, with thousands of grants rescinded because of policy changes and thousands more stalled by delays and glitches. Applicants awaiting decisions grew increasingly desperate as the remaining funding dwindled, Stacy Cowley reports for The New York Times.
When Congress created the restaurant fund in March as part of the Biden administration’s $1.9 trillion American Rescue Plan, it ordered the Small Business Administration to put a priority on funding for businesses owned by women, people of color and military veterans.
But with demand far outpacing the money available, that approach risked leaving all applicants outside the priority groups empty-handed. Several white business owners sued, and federal judges ruled that they were likely to succeed in proving their claims that the program’s policy violated the Constitution’s equal protection clause. In response, the S.B.A. ended the policy and rescinded the awards of nearly 3,000 priority applicants who had been told they would receive grants.
For those who got grants, the money was often a lifeline. Tamra Patterson, the owner of Chef Tam’s Underground Cafe in Memphis, received funding in May. She immediately hired more workers and gave her employees a raise to $16 an hour.
“This literally resuscitated my business,” she said. “This past year has been like sucking air through a straw in the middle of the ocean. This finally let us breathe.”