Wisconsin Small Business Development Center Provides Updates on Loans

Thursday, June 17th, 2021 -- 12:01 PM

The Wisconsin Small Business Development Center provided updates on available loans to help individuals recover from the coronavirus pandemic.

According to the SBA, more than 362,000 businesses applied for the Restaurant Revitalization Fund, seeking $75 billion, nearly three times what Congress had allocated. The SBA had created “priority periods” for certain RRF applicants.

Some restaurant owners sued, claiming that the priority period was discriminatory. Several judges agreed, prompting the agency to alter its approach. In court filings on Friday, the SBA said it had, in late May, in response to the legal actions, stopped payment on priority applications.

The SBA also reported that because of the lawsuits, it revoked approvals for 2,965 previously approved applicants and these applicants will be paid only “once it completes processing all previously filed non-priority applications, and only then if the RRF is not first exhausted.”

Other applicants who expected to be part of the priority queue, tens of thousands of them, according to industry groups, are stalled, waiting to hear if they’ll be approved.

The SBA was able to process approximately 72,000 priority applications, totaling $18 billion before the lawsuits required them to shift priority distribution away from specific demographic groups.

Following the priority period, the SBA distributed funding for an additional 28,000 restaurants from both priority and nonpriority groups, leaving approximately $1.1 billion in funds left, and the SBA stated they will continue processing grants for non-priority groups until the funding runs dry.

Last week, Congress announced that it introduced legislation for a $60 billion replenishment of the RRF, but there is no word yet if or when that legislation would be voted on in Congress.

According to sources that were present at an SBA hosted meeting on Monday, the SBA stated unless more funding is provided by Congress more than 170,000 applications totaling $43 billion would not receive funding.

According to the pending legislation, if the extra funding is approved by Congress, businesses that have already applied for RRF, will not need to apply again.

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