SBA delays relief money from thousands of restaurant owners due to discrimination lawsuit

Published: Jun. 29, 2021 at 8:20 PM CDT|Updated: Jun. 30, 2021 at 7:03 AM CDT
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LUBBOCK, Texas (KCBD) - The Small Business Administration delayed millions in relief money as a pending discrimination lawsuit makes it’s way through the courts.

At least 3,000 restaurants were approved to have their 2019-2020 losses replenished. Now, they don’t know when that money will be released.

This money, one tangent of the American rescue plan and the restaurant revitalization funds, would replenish the money businesses lost from 2019 to 2020.

This could mean hundreds of thousands of dollars with a cap of 8 million.

When congress approved the $28 billion of available relief, they asked that veterans, women, and disadvantaged businesses were prioritized.

Some business owners felt that they were being discriminated and sued the small businesses administration.

“What this is arguing is that maybe someone that was not in one of those categories did not have a fair chance at getting this money. Now, they could, anybody could apply when it opened, and the SBA sorted them into the groups.” Randy Burch with the small business development center is helping clients navigate the pause in funding.

At least $75 million is needed, of the $28 billion in available relief funding.

“They need, like I said, almost triple that to fund all of these. There are about 3000 applications right now that are held up because of this lawsuit, and just kind of waiting to see where that goes,” Burch said.

There is an effort underway in congress to add more money, but it is far from assured.

However, Burch said as the state re-opens, restaurants are staying afloat for now.

“Most of the restaurant owners that I’ve talked with are surviving, they’re, they’re making it now that everything’s opened back up, people are, are eating out again, things are open at 100%. So most of them are doing okay. This extra money would really replace their losses. And that is what it really helped with,” Burch said.

Burch says that restaurants have had support from the paycheck protection program and recently the COVID-19 economic injury disaster loan has expanded their loans from $250,000 now to $500,000. That 30-year loan with low interest still has billions in unclaimed funds.

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