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How a Relief Fund for Restaurants Picked Winners and Losers

James Hutton sits for a portrait in Players Sports Grill & Arcade in San Francisco on Dec. 23 2021. (Peter Prato/The New York Times) When Congress created a grant program early this year to help battered bars and restaurants survive the pandemic, one thing was immediately clear: The money would not be enough. The Restaurant Revitalization Fund contained $28.6 billion, far below the $100 billion that industry groups estimated was needed.

That made the rules about priority treatment — which were upended midstream by lawsuits from white male business owners who called them unfair — a crucial factor in determining who received relief.

But Small Business Administration records obtained by The New York Times reveal a capricious methodology for determining winners and losers. In the most extreme cases, applicants whom lawmakers intended to favor — women and business owners from certain racial and cultural groups — ended up effectively locked out. And even those unaffected by the litigation found themselves in a race for cash in which later applicants sometimes beat out those who had applied much earlier.

“So many of the people who needed this the most were left out,” said Matt Buskard, the owner of Bobcat Bonnie’s, a small chain in and around Detroit. Three of his locations had six-figure grants approved and then canceled a month later after lawsuits threw the program into turmoil.

The restaurant fund, which the Small Business Administration ran, was intended to be a targeted program with more lucrative aid than earlier efforts, like the agency’s Paycheck Protection Program. It offered grants of up to $10 million to cover the shortfall between pre-pandemic revenue and 2020 sales, minus other relief payments — effectively making the restaurants whole for a lost year.

Heeding the wishes of President Joe Biden, who pledged to put equity at the center of his agenda, lawmakers initially ordered the Small Business Administration to put a priority on applications from women, military veterans and certain racial and cultural groups. But a few weeks after the fund started making awards, court challenges put that to a halt. The agency was then supposed to start awarding grants “in the order in which applications are received.”

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