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Restaurant Revitalization Fund Helps Many Businesses

April 29, 2021

The American Rescue Plan, passed March 11, created a $28.6 billion Restaurant Revitalization Fund Grant (RRFG) to provide emergency assistance for eligible restaurants, bars, and other qualifying businesses impacted by Covid-19. The Small Business Administration (SBA) will manage the program.

Registration will begin Friday, April 30, at 9 a.m. EDT and the SBA will begin accepting applications via the application portal on Monday, May 3, at 12 p.m. EDT. The application portal will remain open to any eligible establishment until all funds are exhausted.

This program will provide eligible entities with funding equal to their pandemic-related revenue loss up to $5 million per location, not to exceed $10 million total for the applicant and any affiliated businesses. The minimum grant amount is $1,000.

Entities that applied for and received a first draw and second draw Paycheck Protection Program (PPP) loan are eligible to apply for an RRFG, but the RRFG will be reduced by the total amount of PPP loans. Covid-19 Employee Retention Tax Credits (ERTC) taken in 2020 and/or 2021 are not deducted from eligible RRFG amounts and grants will not be taxed as income. Funds awarded must be used for allowable expenses by March 11, 2023.

It will be important to apply as soon as possible because eligible applications will be funded on a first-come, first-served basis. Applicants are encouraged to register for an account in advance at restaurants.sba.gov. If an applicant is planning on working with an SBA Point-of-Sale (POS) Restaurant Partner, they do not need to register beforehand with the site.

Should the RRFG demand exceed supplied funds, there is a possibility Congress might appropriate more funds to the program.

Who is eligible?

  • Restaurants
  • Food stands, food trucks, food carts
  • Caterers
  • Bars, lounges, saloons, taverns
  • Licensed facilities or premises of a beverage alcohol producer where the public may taste, sample, or purchase products
  • Similar places of business where the public or patrons assemble for the primary purpose of being served food or drink
  • Snack and nonalcoholic beverage bars
  • Bakeries
  • Brewpubs, tasting rooms, taprooms
  • Breweries and/or microbreweries
  • Wineries and distilleries
  • Inns

Who is not eligible?

  • Entities that, as of March 13, 2020, own or operate (together with any affiliated business) more than 20 locations, regardless of whether those locations do business under the same or multiple names.
  • Entities that have received a Shuttered Venues Operations Grant (SVOG) or have a pending SVOG application.
  • Entities that are publicly traded or majority-owned and controlled by a publicly traded corporation.
  • Entities that do not have a place of business located in the U.S., do not operate primarily within the U.S., and do not make a significant contribution to the U.S. economy through payment of taxes or use of American products, materials, or labor.
  • Entities that are state- or local government-owned or operated business.
  • Entities that are permanently closed.
  • Entities that filed for bankruptcy under Chapter 7 or are liquidating under Chapter 11.
  • Entities that have filed for bankruptcy under Chapter 11, 12, or 13 but do not have an approved plan for reorganization.

How are grant amounts calculated?

In general, the formula for grant funds is: [Change in Gross Receipts from 2019 to 2020] – [PPP Loans] = grant fund.

For businesses that began operations partially in 2019, the calculation is [Average monthly gross receipts of 2019 multiplied by 12] – [2020 gross receipts]– [Total amount received in PPP loans (1st and 2nd Draw)] = grant fund.

For businesses opened in 2020 and 2021 the formula is: [Eligible expenses] – [Gross receipts received in 2020] – [Total amount received in PPP loans (1st and 2nd Draw)] = grant fund

Which applicants are prioritized?

All eligible businesses will be able to apply starting on May 3, but for the first 21 days, the Small Business Administration will approve claims exclusively from businesses that are majority-owned by people who fall into one of the priority groups designated by Congress: women, veterans, and individuals who are both socially and economically disadvantaged (i.e., applicants who meet certain income and asset limits and are Black, Hispanic, Native American, Asian-Pacific American or South Asian American).

The business in question must be owned by at least 51% of one of these protected groups to qualify. The management and daily operations must be controlled by one or more members of these protected groups. Applicants must self-certify that they meet these requirements to be eligible.

Following the 21-day period, all eligible applications will be funded on a first-come, first-served basis.

If you believe you may qualify for a RRFG and you have questions or need assistance, please reach out to your Clark Schaefer Hackett advisor.

All content provided in this article is for informational purposes only. Matters discussed in this article are subject to change. For up-to-date information on this subject please contact a Clark Schaefer Hackett professional. Clark Schaefer Hackett will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through this site.

Guidance

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