Why Some Restaurants Have Still Not Received COVID Relief Grant Money

When the pandemic hit, restaurants reeled under the weight of having to close up their brick-and-mortar shops. As part of their relief effort, the U.S. government set up the Restaurant Revitalization Fund to provide emergency relief to restaurants, bars, cafes, and other eateries affected by the changes brought on by COVID-19 (via NYC Business). The grants potentially supply up to $5 million to help recoup revenue that food service businesses lost during 2020. On paper, this program sounds amazing, but a legal snag has created a massive problem for many eligible businesses.

The fund gave priority to restaurants and businesses owned by women, people of color, veterans, and other marginalized groups that lacked access to capital, but due to a series of lawsuits, many of these groups won't receive the aid they desperately need (via Eater). The problems started when the amount of grants outweighed the total amount of funding set aside to aid failing businesses. Everything worsened when a pair of restaurateurs in Texas sued the Small Business Administration, the organization that distributed and handled the grants, due to claims that the funding discriminated against white men. A Texas judge upheld the case as legitimate and it earned the attention of the right-wing group America First Legal. The advocacy organization, created by former Trump staffers Stephen Miller and Mark Meadow, extended the lawsuit to cover all white-owned businesses in Pennsylvania and Texas.

A glimpse of hope for affected businesses

After the lawsuit was extended, nearly 3,000 businesses owned by women, people of color, veterans, and other marginalized groups were notified that they did not receive any aid despite being in the priority group, while the original pair of restaurateurs in Texas who launched the discrimination lawsuit received their payout on June 1 (via Eater). While the situation appears bleak for many who truly needed the aid, a bipartisan group in Congress has emerged that wants to extend funding for the Restaurant Revitalization Fund so these minority-owned businesses don't have to shutter (via Newsday). While this comes as great news to many struggling restaurant groups, the proposed $60 billion has yet to be allocated to the fund.

In the meantime, a wide swath of white male-owned businesses have claimed the money originally earmarked for precarious restaurants. Make sure to keep your eyes peeled for more news as this situation develops, as this funding has the potential to make or break some of your favorite eateries. With any luck, the affected restaurants can stay afloat and keep feeding hungry patrons for years to come.