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Source : Small Business Administration
May 13, 2021
Author : Amy Chan
Isabella Guzman, the administrator of the Small Business Administration, is targeted by a lawsuit from a conservative group over a 21-day exclusive period for disadvantaged businesses in the new Restaurant Revitalization Fund program.
As we previously reported, “women and veteran-owned businesses, as well as other kinds of disadvantaged businesses, will take priority during the first 21 days of the program,” in the $28.6 billion Restaurant Revitalization Fund (RRF).
That exclusive period for women, veteran and minority-owned businesses pushes white men to the “back of the line,” argues the conservative Wisconsin Institute for Law & Liberty in a new lawsuit which names SBA administrator Isabella Guzman as the defendant.
According to the Associated Press, the conservative outfit is suing on behalf of bar and restaurant owner Antonio Vitolo, who applied immediately for aid under the RRF program but did not qualify under the exclusive period rules, the lawsuit argues.
The Wisconsin Institute for Law & Liberty argues this amounts to unconstitutional discrimination, and is looking to put a complete stop to SBA payouts until the program removes the rule and starts processing aid requests on a first-come, first-service basis.
The Associated Press quotes the lawsuit: “Given the limited pot of funds, this puts white male applicants at significant risk that, by the time their applications are processed, the money will be gone.”
While more than 1,000 businesses have closed per day in the United States, the restaurant industry has been one of the hardest hit sectors from the coronavirus pandemic, with one-in-six being forced to close their doors.
And while the Associated Press credits the Biden administration with the claim that minority and women-owned businesses have suffered more than other kinds of small businesses, the numbers back up that statement.
On Wednesday, the SBA put out new numbers on the Restaurant Revitalization Fund, announcing that the program “has received more than 147,000 applications from women, veterans, and socially and economically disadvantaged business owners, requesting a total of $29 billion in relief funds.”
While the press release did not mention it, it’s worth noting that the requests for funds from businesses eligible under the exclusive period surpass the total amount of funds made available for the program under the American Rescue Plan by roughly $400 million even before the program’s exclusive period has ended.
According to the SBA, a whopping total of $65 billion has been requested by institutions both eligible and ineligible for funds in the exclusive period.
However, so far just $2.7 billion of funds have been given out to 21,000 businesses under the program.
“Through the Restaurant Revitalization Fund, SBA is helping thousands of restaurants and other food and beverage businesses across the country get the help they desperately need to recover and rebuild from this pandemic,” said Administrator Guzman.
She added: “The numbers show that we’ve been particularly successful at reaching the smallest restaurants and underserved communities that have struggled to access relief. These businesses are the pillars of our nation’s neighborhoods and communities. We are making progress, but we have much more work to do as we continue reaching our underserved entrepreneurs.”
The press release notes that funding allocations were made to ensure “the smallest of the small restaurants and other eating establishments” will get “the aid needed,” a positive development as our reporting has shown mom-and-pop eateries were hit the hardest by the pandemic.
The SBA says its outreach has included 600 local and national informational events, resulting in “13,114 applications from businesses with under $50,000 in pre-pandemic revenue requesting $330 million in funds.”
In total, 76,183 women business owners, 6,093 veteran business owners, and 42,284 “economically and socially disadvantaged individuals” have requested RRF aid.