Minority and women owned restaurants are out of luck after the Biden administration's attempt to help them first with the Restaurant Revitalization Fund backfired when a spate of lawsuits brought an end to the promised funding.
The Small Business Association (SBA) "fully-cancelled" federal funds after a lawsuit was filed in Texas by a conservative legal group arguing that the Biden administration's efforts to prioritize applicants on the basis of race and gender is unconstitutional, Reuters reported.
In February, the Biden administration issued changes to the $1.9 trillion American Rescue Plan which prioritized women and minority-owned businesses to receive aid before their white-owned restaurant counterparts.
Restaurant owners that fell under these categories were given a three week priority to apply for federal funding over other restaurant owners, all of which have been decimated by the economic shutdowns during the coronavirus pandemic.
Due to the lawsuit, a preliminary injunction issued by the court in Texas stated that the SBA must continue approving funds for non-priority applicants, but "priority" candidates won’t receive funds until after the case is settled.
Because of the Biden administrations unconstitutional prioritization of federal funds, aid has been cancelled until further notice for restaurants owned by women and minorities.
Danielle Lothrop, owner of Toggle's Bottle Shop in Everett, WA, told Q13 Fox she was shocked when she received an email which stated the $128,000 she was initially rewarded was "fully-cancelled."
"I received an email that said you had been awarded $128,000," Lothrop said.
However, Lothrop received an email on Wednesday stating her restaurant would no longer be eligible to receive the funds she was promised. "I got an email from the SBA saying that there is pending litigation, and that all of those funds have been, they call it, 'fully canceled.' So, that gives me no hope of ever receiving that money," she said.
According to Q13 Fox, Lothrop said the allotted funds would have equated to the revenue she lost during the pandemic and she would have been able to pay back-rent and supply her employees with bonuses.
The president of the Washington Hospitality Association, Anthony Anton, called on Congress to continue funding and helping restaurants which have been decimated by the economic shutdowns, Q13 Fox reports.
"Nationally, 3,000 restaurant operators were told they would receive a grant that could save their business – only to have it rescinded. Even before that, applications exceeded funding by $50 billion. We are calling on Congress to backfill the funding and help restaurants that have been decimated by forced shutdowns for more than a year," said Anthony Anton, President and CEO of the Washington Hospitality Association.
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