When Abraham Kwon, who owns a café in an office building in Atlanta, got an email on May 20 telling him he’d been approved to receive a $619,000 Restaurant Revitalization Fund (RRF) grant, he started making big plans.
He gave raises to the steadfast employees who’d stuck with Wildwood Café during the pandemic. And he bought supplies to be ready for the office workers who were slowly returning.
On Wednesday, though, Kwon received an email from the U.S. Small Business Administration (SBA), which oversees the RRF grants, saying his funding had been rescinded.
“This was supposed to be the thing that kind of made us whole,” he said.
Kwon is one of an unknown number of restaurant operators who had their RRF grants rescinded this week, the second round of awardees to see their promised funding dissolve this month.
About 10 days ago, 2,965 restaurateurs who had been approved for RRF grants were alerted they would not be getting the lifeline. Everyone who lost their funding during that round had applied for federal relief during the program’s first three weeks, part of the priority group of women, veterans, and those deemed socially and economically disadvantaged who were given early access to the $28.6 billion fund.
But three court cases challenged that funding in lawsuits alleging the plaintiffs were unfairly shut out of the pool of money.
The SBA did not respond Thursday to repeated Restaurant Business requests for information on this latest round of rescinded grants, including how many applicants were affected and whether they were all part of that priority group.
Lacking answers, the frustration is palpable among restaurant owners who have had their hopes dashed by this latest round of funding reversals.
Toki Sawada, who owns Japanese restaurant Binchoyaki Izakaya in Sacramento, said she crumpled to the floor, in tears, when she got the email notification Wednesday morning.
“You feel that your heart just drops to the floor,” Sawada said. “We’re broke. It was just so shocking yesterday, my brain was hurting. I have to change my perspectives and move on, but I don’t feel like we’ve gotten the right answers.”
After getting her grant approved on May 14, Sawada called the SBA every two days to see where her money was. Earlier this week, she said she was told, “Oh, don’t worry. You’re approved. They’re having a glitch, they’re fixing a glitch and everything will get funded.”
The next day, she received the email saying her funding had been rescinded.
Many operators impacted by the reversal are sending letters to their representatives in Congress, pressing them for answers and replenishment of the RRF. That’s the advice from small business advocacy group Main Street Alliance.
“The No. 1 thing you need to do is call your representative and tell them they need to replenish the program,” Sarah Crozier, the group’s communications director, said. “This lawsuit has put a stay on the disbursement of funds. If there was enough funds to go around, we wouldn’t have this problem. In the long-term, there needs to be a real reckoning about the conservative legal strategy that causes undue harm to people disproportionately impacted by the pandemic.”
The Independent Restaurant Coalition on Thursday said it was “beyond disappointed” in the grants being taken away from women and BIPOC restaurant owners.
“The Restaurant Revitalization Fund already gave tens of thousands of local restaurants and bars the vital support needed to continue serving their communities,” IRC Executive Director Erika Polmar said in a statement. “Our coalition is urging Congress and the Biden administration to refill this program as soon as possible so more small businesses can keep their doors open.”
Mathi Pothiappan, owner of upscale Indian restaurant Cholanad in Chapel Hill, N.C., said he was exploring a possible class action lawsuit for those who’ve lost their funding.
“We are in this limbo right now,” Pothiappan said. “I’m heartbroken. They did not do the program right … We were counting on this money.”
Greg Leon, who found out his grant had been rescinded earlier this month, has spoken with his state representatives but is still waiting for answers. Currently, his Spanish-Portuguese restaurant Amilinda in Milwaukee is caught in a “vicious circle” of needing to bring on more staff to add more tables but not having the money to do so, he said.
“The worst part is there’s this feeling, this sense, that people don’t care,” Leon said. “Restaurant workers give so much of our time and our life, and we work holidays and we work weekends, Mother’s Day, Father’s Day, Christmas, New Year’s, so everybody can have a good time and celebrate. So, when it’s time for us to get some help, I feel like nobody cares.”
Wildwood Café’s Kwon said his business remains down 70% of where it was pre-pandemic. One of his employees noted this week that Kwon looked stressed and said, “If you need to cut my pay, you’re welcome to do that.”
“I’ve already given them the raise,” Kwon said. “I don’t want to take it back.”