(WXYZ) — It’s a week that was supposed to be full of good news for restaurants like Bobcat Bonnies, finally back to business with no restrictions. However, on Wednesday, owner Matt Buskard received a devastating email.
“It is another punch in the gut to an industry that didn’t really need it,” Buskard said.
That email came from the Small Business Administration, telling him that his long-awaited payment from the Restaurant Revitalization Fund was no longer coming.
“To have that lifeline thrown to us was exciting. To find out that it was going to be rescinded was devastating,” Buskard said.
Devastating because Buskard was told he was already approved for the money back in May. He was initially told in 3-5 days, hundreds of thousands of relief dollars would be in his bank account. With that in mind, he began hiring more staff and buying new products.
“We started making plans knowing that the money was coming because from day one we were told this money was coming,” Buskard said.
As 5 days turned to 10, then 14, Buskard kept reaching out to the SBA. He provided 7 Action News with screenshots of his communication with the SBA which showed responses saying the money was delayed but to "be assured the award funds are reserved and will be sent. Once the award was approved the funds are not subject to running out for your approval.”
“It got to a point where you’re like ‘are the funds coming?’" Buskard recalled. "They said 'yes, rest assured your funds are allocated to you. They won't run out.'”
The hold-up came from multiple lawsuits filed against the SBA because the first 3 weeks of the RRF program prioritized applicants from socially and economically disadvantaged groups. This was mandated by Congress as part of the American Rescue Plan.
However recent court rulings against the SBA put a halt on payments to those priority applicants. As those payments were on hold, the rest of the money was allocated and is now gone.
Now instead of giving priority to these disadvantaged groups, the plan backfired and ended up preventing them from getting any funding at all.
“In that situation, you’re actually doing the same exact thing just on the flip side of the argument,” Buskard said. “They left us in a worse position than before.”
Bobcat Bonnie's was one of nearly 3,000 priority businesses that had its approved funding rescinded.
In a statement, an SBA spokesperson couldn’t comment on the litigation but said “We remain committed to doing everything we can to support disadvantaged businesses in getting the help they need to recover from this historic pandemic and restore livelihoods.”
Starting Monday Bobcat Bonnie's planned to close for a week, giving all employees a one-week paid vacation. The funds from the grant were supposed to help with that effort.
Despite losing the funds, those plans are still in place.
"We can’t look at our staff who’ve been working insanely hard and say 'hey, I know I made this promise to you but I can take it back,” Buskard said. "Business doesn't work where you make a promise to someone and you tell somebody 'rest assured' that they’re going to have something, then you renegotiate the terms. You can’t do that and we won't do that to our staff.”
Matt is now pushing for members of Congress to refund the program so businesses like his can finally see the relief they were promised.
In a statement, the CEO of the Michigan Restaurant and Lodging Association said.
Small business owners are reeling from the SBA rescinding approval of their Restaurant Revitalization Fund Grants. These men and women have struggled to keep their restaurants afloat during the most challenging period in our industry’s history. The acceptance letter they received from the SBA represented a commitment to provide not only federal funding but also a needed bit of hope that they would survive to serve their community. The announcement that their grants will be awarded to others has left them confused, frustrated, and afraid they will have to close their doors for good. This, combined with the fact that the SBA received over 372,000 applications requesting $76 billion in funds last month, is an indisputable example of why elected officials in Washington DC need to replenish the Restaurant Revitalization Fund immediately.
The program only had $28.6 Billion in funds available, meaning the majority of the more than $72 billion in applications went unfulfilled.
A spokesperson for Senator Gary Peters also issued a statement, saying "Senator Peters is disturbed to hear about lawsuits and delays in funding that is crucial for helping our communities recover from this pandemic. He believes it’s unacceptable that these funds are being withheld and will continue fighting to help restaurants and small businesses get the support they need to emerge from this pandemic.”