Small businesses find themselves without federal funds after court order

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MADISON, Wisconsin (WMTV) – Nearly 3,000 small business owners are facing cuts to federal money promised to them 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 in limbo.

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

“We know restaurants and the hospitality industry in general have been disproportionately affected by the pandemic,” said Greater Madison Chamber of Commerce president Zach Brandon. He added: “It’s not just a showcase, it’s a livelihood.”

The fund has prioritized businesses owned by women, ex-combatants and socially disadvantaged groups. However, some business owners have filed discrimination lawsuits and federal courts issued an injunction, forcing the SBA to reverse payments the agency had already promised nearly 3,000 businesses and stop prioritizing.

“The inability for them to be on the front lines for this part of the recovery is a bad economic decision,” Brandon said.

Brandon added that the move could slow the economic recovery. He feared that businesses would close their doors, which would cost jobs.

“Businesses owned by people of color, women, veterans, also disproportionately employ this demographic,” he explained.

Many federal aid programs are also strapped for cash, including the Restaurant Revitalization Fund, leaving less resources for struggling businesses.

“The question is how fast are we going to recover and who will be left behind in the recovery,” Brandon said.

When asked what resources were available for those waiting for money from the Restaurant Revitalization Fund, Brandon recommended that business owners look into the Economic Disaster Lending Program, also run by the SBA. The EIDL program is a federal loan intended to cover normal operating expenses and financial obligations.

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