In late May, the Small Business Administration stopped processing relief applications from women, veterans, and people of color. Then the agency started rescinding their approvals.

When Kazu Fukumoto, the owner of a Japanese restaurant in Austin, Texas, got word that he had been approved for a Restaurant Revitalization Fund (RRF) grant in late May, it felt like a weight had been lifted off his shoulders.

The pandemic had taken his namesake company Fukumoto right to the edge of insolvency. At first, Fukumoto had to shut down operations completely. A few months in, he launched takeout and delivery options, but that revenue couldn’t fully cover the cost of staying afloat. Fukumoto said he had to dip into savings to make up the difference.

What had first appeared as a lifeline soon sent Fukumoto into a tailspin. On June 12, the restaurant received another email from the Small Business Administration (SBA)—the agency overseeing the fund—this time stating that it would not be able to pay out the promised award. Recent litigation filed by conservative groups alleging discrimination against white men had forced SBA to stop processing applications from priority groups, including women, veterans, and minorities, the agency explained.

Since then, SBA has continued to rescind promises made to priority applicants. On June 23, it sent out another email to an unspecified number of recipients saying that it would have to cancel their grants due to the lawsuits. But one business owner who received this notice (who requested that her identity be withheld) had previously been approved for relief on May 20—well before any of the legal challenges had taken effect.

Read the full article about the downsides to the Restaurant Revitalization Fund by Jessica Fu at The Counter.