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Women And Minority Restaurant Owners’ Relief Funding Rescinded, Another Blow To Struggling Industry


Mokbar owner Esther Choi was elated when she heard the news about the Restaurant Revitalization Fund granting $28.6 billion in aid to struggling restaurants this past April. She was even more excited when she heard that for the first 21 days, applications from women and minority owned businesses would be prioritized. For the first time as a restaurant owner, being a woman and being Asian was finally going to benefit her.

Federal aid relief programs have certainly played a huge role in helping businesses with their economic comeback, pulling many back from the brink of completely shutting down. But studies showed that one year after the Paycheck Protection Program (PPP) launched, women, Black and minority-owned businesses were left behind. There were a few reasons for this, mainly due to a lack of connections, resources and access.

When it first came out in 2020, the PPP program was rolled out very quickly. This was due to the sense of urgency in wanting to provide economic relief and allow small businesses to access funds as early as possible. Because of this speedy rollout, some rules and restrictions were adjusted as the program evolved. This made it fairly difficult to navigate, even for those who had time, resources and money to spend getting help with the process. 

One of the biggest barriers for women and minority-owned businesses was due to the fact that the government relied on banks to make the loans. And naturally, most banks prioritized their wealthiest, most financially secure clients first, which bumped everyone else towards the back of the line. The original program also excluded sole proprietors and independent contractors, which are two of the most widely used structures for minority-owned businesses.  

That’s why, a year later, in an attempt to rectify some of their earlier oversights, women and minority-owned restaurants were prioritized in the Restaurant Revitalization Fund. Congress created the fund as part of the $1.9 trillion relief bill passed in March. Under the program, the Small Business Administration would approve applications from priority groups that included women, veterans and individuals who qualified as both socially and economically disadvantaged for the first 21 days. 

“It was a huge win for our industry,” Choi remembered. “And on top of that, they were prioritizing veterans, women and minority applications, allowing us to apply first. For me, it was like, wow for the first time in my entire life and career, being a female and being Asian is actually going to work in my favor. That was mind blowing.” 

Choi was one of the first to submit her application the day the process began. She was determined to make good on every vendor, every employee, and every landlord that was attached to Mokbar. She received the notification of approval within three days of submitting her application. “I still have the letter,” she said. “I couldn’t believe I was going to be able to pay back our back rent.” 

Choi emailed her landlords with the good news. She started notifying vendors. 

And then, in a crushing blow only one month later, Choi was notified that the funds she had been promised would be rescinded. 

When the Small Business Administration announced the new application process, they were clear to warn restaurant owners that in all likelihood, that three-week priority period alone would use up much of the budget allocated to the relief fund. Sure enough, around $27 million of the $28.6 million dollar relief fund had been granted to applications that came in during that priority period. 

Restaurant owners who weren’t able to apply during those first 21 days, primarily white men, were outraged. In Texas and Tennessee, lawsuits accused the federal government of discrimination. These protest lawsuits were successful enough to actually halt payments to those who had been prioritized as part of these efforts, including 3,000 women and minority business owners, like Choi, who had already been notified they would be receiving the relief. 

When Choi got the letter stating that the funds initially promised would not be paid, she was devastated. The note started off by explicitly expressing the SBA’s frustration with the situation. 

It read, “We regret to inform you that, due to recent court rulings, the SBA will not be able to disburse your Restaurant Revitalization Fund award. The Restaurant Revitalization Fund, enacted through the American Rescue Plan Act, prioritized applications from small businesses owned and controlled by women, veterans, and socially and economically disadvantaged individuals for the first 21 days of the program. After SBA launched the Restaurant Revitalization Fund, three lawsuits were filed challenging the 21-day priority application period—one in the Eastern District of Tennessee and two in the Northern District of Texas. These lawsuits have led to three court rulings that preclude us from disbursing award funds to you. At the time SBA had to stop processing priority applicants, we were reviewing your application due to an invalid industry flag. SBA’s leadership is frustrated with this outcome and remains committed to doing everything we can to support disadvantaged businesses getting the help they need to recover from this historic pandemic.”

The letter went on to share that if additional funds were released as part of a forthcoming relief package, her application would be considered in that pool. 

”To make matters worse,” Choi recalled, “At the exact same time (of receiving this letter,) all of my friends in the industry who were white guys, they all suddenly got their funding. I think I cried for a week following. It was unbelievable.”

She pointed out bluntly, “My funds were taken away and given to them.”

Restaurants have taken blow after blow over the past 18 months. A recent New York Times article outlines the many issues facing restaurant owners in New York, specifically. “Many of the part-time artists and actors who worked the city’s restaurants left town as cultural venues closed. Staff shortages have exhausted the remaining employees and curtailed service. Gaps in food supplies have resulted in stripped-down menus. And a crush of eager, sometimes impatient, diners is adding to the strain. But the biggest concern for restaurateurs is that the Delta variant’s advance in coming months could imperil the rebound in revenue they had hoped for.”

“The only way we’re going to see more money is if the government releases more funds,” Choi said. That, and a way to operate safely and profitably despite the Delta variant and the upcoming colder weather, is what Choi and other restaurant owners are quite literally banking on.

Last month, a third attempt was made by Congress to pass $48 million in relief funding to restaurants, but the goal of unanimous consent was blocked. Lawmakers like Maryland representative Ben Cardin begged his colleagues to pass the funding, noting that if they didn’t, “many of our most cherished restaurants will not survive.” 

So what now? “I might have to close that location,” Choi said. “At this point I’m praying for a miracle.” 

For those who want to help, the Independent Restaurant Coalition has a form that lets you automatically send emails to your representatives to encourage them to take action.



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