How a Relief Fund for Restaurants Picked Winners and Losers

More than 60 percent of the program’s funding — $18 billion — went to businesses run by women, veterans and historically underserved groups, mostly during an initial 21-day exclusivity period. But after court challenges overturned that rule, the approval process went haywire.

This Post: How a Relief Fund for Restaurants Picked Winners and Losers

Records reviewed by The Times show that hundreds of the 24,000 grants made after the May 26 rule change went to applicants who were supposed to have been bumped to the end of the line. During that same period, the agency canceled at least 3,000 already-approved awards, including Mr. Buskard’s.

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More than 1,000 successful applicants filed their claims on or after May 19, the day after the agency said the fund had effectively run dry. (Those figures exclude applications from businesses with less than $50,000 in annual sales; a set-aside for tiny companies had cash left until the very end.)

Mr. Aiyash was one of the lucky latecomers. He and his business partners opened Pazzo’s in 1999 and kept it running through the Great Recession. The restaurant had up to 60 employees before the pandemic; some had worked there for two decades.

The pandemic forced Pazzo’s to close for sit-down dining for more than a year and mostly wiped out the office-worker lunch crowd it relied on. Two Paycheck Protection Program loans totaling $340,000 helped a bit, but Mr. Aiyash’s outlook was bleak: He didn’t apply to the Restaurant Revitalization Fund right away because the odds seemed impossibly long.

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“I just didn’t believe it was real, to be honest,” he said.

But a friend who had received a grant persuaded him to at least fill out the paperwork, and Mr. Aiyash filed his application just hours before the program closed. The grant money showed up in his bank account a week later — a happy surprise that helped Pazzo’s avert a permanent shutdown.