Restaurant Revitalization Fund
The Restaurant Revitalization Fund which provides federal grants to the hardest hit sector of the economy during COVID-19 is about to become a reality. President Biden is expected to sign a $1.9 trillion relief package, the American Rescue Plan this week. As part of this plan $28.6 billion has been allocated to small and mid-sized restaurants for The Restaurant Revitalization Fund.
What does this mean?
The Restaurant Revitalization Fund allows eligible businesses to receive grants equal to their pandemic-related revenue loss, with a maximum of $10 million per business entity, or $5 million per physical location. How much you receive depends on the revenue your business lost due to the pandemic and if it received a PPP loan.
Businesses that were established before January 1, 2019, can calculate their grant amount by subtracting your 2020 gross receipts from your 2019 gross receipts.
Businesses that were established during 2019 can receive a grant equal to the difference between:
- Average monthly 2019 gross receipts, multiplied by 12
- Average monthly 2020 gross receipts, multiplied by 12
Businesses that were established on or after January 1, 2020, can receive a grant equal to eligible payroll expenses, less gross receipts from that year.
Who is eligible?
Eligible businesses include any location where patrons gather for the purposes of being served food and beverages: restaurants, bars, caterers, lounges, inns, taverns, saloons, brew pups, taprooms, tasting rooms, food trucks, food carts, or food stands.
Who is not eligible?
- Restaurant chains that, together with affiliated businesses, own or operate more than 20 locations as of March 13, 2020
- Restaurants that have a pending application for or have received a grant for shuttered venue operations
- Publicly-traded companies, or
- State or local government-operated businesses.
What can the grant fund be used for?
- Payroll costs
- Rent payments (excluding pre-payments)
- Principal and interest payments on a mortgage (excluding pre-payments)
- Maintenance expenses including construction to accommodate outdoor seating and walls, floods, deck surfaces, furniture and fixtures, and equipment
- Supplies (including PPE)
- Food and beverage expenses
- Covered supplier costs
- Operational expenses
- Paid sick leave
- Any other expenses that the SBA deems essential to maintaining the eligible business
How and when can you apply for the grant?
Unfortunately, as of the date of this advisory, the SBA’s application process is not yet open. A
During a Senate Small Business Committee hearing, senior SBA official Patrick Kelley confirmed the U.S. Small Business Administration (SBA) is targeting early April to launch a phased rollout of the $28.6 billion Restaurant Revitalization Fund (RRF). In addition, state restaurant associations have been meeting with Congressional leaders to learn more about details regarding applications, etc.
Key updates resulting from these meetings include:
- SBA will likely start posting relevant qualifications, instructions, and other information for restaurant operators over the next 7-10 days and give guidance on supporting documents needed to apply
- SBA will open applications in April
- SBA is currently planning the whole process will take place over the next 30-45 days
- SBA also confirmed applicants for the Fund program will not need to register for a DUNS number or on SAM.gov.
- The process is slow on account that the SBA has to build a technology platform from scratch with the capability of dealing with the crush of applications and likely automating the process so it’s as efficient as possible. Once it’s up and running, the grants will function like direct payments to the applicants. The SBA is also in talks with third-party POS vendors to discuss accessing relevant sales data needed for application processing
We will continue to provide updates as the SBA releases additional guidance. Please check back periodically as we will post updates here.