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Restaurant Revitalization Fund Applications Open May 3: How to Apply

Restaurant Revitalization Fund Applications Open May 3: How to Apply

The latest COVID-19 stimulus bill includes a separate relief fund called the RESTAURANTS Act, which sets aside approximately $28 billion for a Small Business Administration (SBA) grant program that helps support the food and drinks service industry impacted by pandemic shutdowns. Dubbed the Restaurant Revitalization Fund (RRF), applicants must consider a few key details before submitting applications, including the covered period, what constitutes an eligible entity, and how to apply.

Here’s what you need to know about this vital funding.

Qualifying restaurants can apply using this link

Note: This blog was originally published in March 2021 and has been updated to reflect new information released by the SBA.

 

What is the RESTAURANTS Act?

The RESTAURANTS Act is a component of the American Rescue Plan Act of 2021, which was signed into law on March 11, 2021. It established a $28.6 billion package—known as the Restaurant Revitalization Fund (RRF)—that provides a critical lifeline to the food and drinks service industry by covering the amount an organization lost in revenue due to the pandemic. 

The bill can be read in full here.

 

What is the Covered Period for the Restaurant Revitalization Fund?

Eligible organizations are permitted to use the tax-free funding from the RRF to cover eligible expenses incurred from Feb. 15, 2020, to Dec. 31, 2021, (or a date later determined by the SBA). 

 

Minimum and Maximum Grant Amounts Under the Restaurant Revitalization Fund

The SBA is authorized to provide funding up to $5 million per location, not to exceed $10 million total for the applicant and any affiliated businesses. The minimum award is $1,000.

 

Which Organizations Are Eligible to Receive Funding Through the Restaurant Revitalization Fund?

The SBA says that eligible entities include any ...

  • Restaurants
  • Food stands, food trucks, food carts
  • Caterers
  • Bars, saloons, lounges, taverns
  • Snack and nonalcoholic beverage bars
  • Bakeries (onsite sales to the public comprise at least 33% of gross receipts)
  • Brewpubs, tasting rooms, taprooms (onsite sales to the public comprise at least 33% of gross receipts)
  • Breweries and/or microbreweries (onsite sales to the public comprise at least 33% of gross receipts)
  • Wineries and distilleries (onsite sales to the public comprise at least 33% of gross receipts)
  • Inns (onsite sales of food and beverage to the public comprise at least 33% of gross receipts)
  • Licensed facilities or premises of a beverage alcohol producer where the public may taste, sample, or purchase products

Additionally, organizations that received loans using the Paycheck Protection Program (PPP) are eligible. However, the maximum sum of the possible grant funding subtracts the amount spent through the PPP. 

 

Which Organizations Are Not Eligible to Receive Funding Through the Restaurant Revitalization Fund?

Likewise, according to the National Restaurant Association, some organizations aren't eligible to receive funding through the RRF. These include:

  • Entities that operate more than 20 locations under the same or different names as of March 13, 2020
  • Publicly traded companies
  • Entities that have received a grant (or have a pending application) under Section 324 of the Economic Aid to Hard-Hit Small Business, Non-profits, and Venues Act (also known as a Shuttered Venue Operators Grant)
  • Entities that are permanently closed 
  • Entities that are state- or local government-owned or operated
  • Entities that filed for bankruptcy under Chapter 7 or are liquidating under Chapter 11
  • Entities that do not have a place of business located in the U.S. or operate primarily within the U.S.

 

What is Considered an Eligible Expense?

According to the SBA, grant funding can be used to pay for the following:

  • Business payroll costs (including sick leave)
  • Payments on any business mortgage obligation
  • Business rent payments (but not the prepayment of rent)
  • Business debt service (both principal and interest but not the prepayment of principal or interest)
  • Business utility payments
  • Business maintenance expenses
  • Construction of outdoor seating
  • Business supplies (including protective equipment and cleaning materials)
  • Business food and beverage expenses (including raw materials)
  • Covered supplier costs
  • Business operating expenses

If an organization fails to spend all of the grant funding—or an organization goes out of business before this period concludes—they are required to return the unused funds. The SBA also confirms that recipients aren't required to repay the funding as long as the granted funds are used on eligible expenses by March 11, 2023.

 

How Can Organizations Apply for Restaurant Revitalization Fund Grants?

Once the program officially opens, organizations can submit grant applications online using SBA Form 3172 through the administration’s website at SBA.gov or through an SBA-recognized Point of Sale Restuarant Partner. 

Eligible recipients must verify tax information using IRS Form 4506-T. Additionally, entities must submit gross receipts documentation to determine payment calculations. 

Qualifying entities can apply using this link

 

How Are Restaurant Revitalization Fund Grants Calculated?

Grant funding is determined using the following calculations:  

    • Entities that were in operation for the entirety of 2019 can receive a grant equal to 2019 gross receipts minus 2020 gross receipts minus PPP loan amounts.
    • Entities that began operations partially through 2019 can receive a grant equal to the (average 2019 monthly gross receipts x 12) minus 2020 gross receipts minus PPP loan amounts.
    • Entities that began operations on or between Jan. 1, 2020, and March 10, 2021, and applicants that haven't opened yet but have Incurred eligible expenses can receive grant funding equal to the amount spent on eligible expenses between February 15, 2020, and March 11, 2021, minus 2020 gross receipts minus PPP loan amounts.

Additionally, the SBA states that under the RRF, gross receipts does not include:

  • Amounts received from Paycheck Protection Program (PPP) loans (First Draw or Second Draw)
  • Amounts received from Economic Injury Disaster Loans (EIDL)
  • Advances on EIDL (EIDL Advance and Targeted EIDL Advance)
  • State and local grants (via CARES Act or otherwise)
  • SBA Section 1112 payments

 

When Can Organizations Apply for a Restaurant Revitalization Fund Grant?

The SBA announced that users can register for the Restaurant Revitalization Fund application portal beginning on Friday, April 30, 2021, at 9 a.m. ET while applications will open on Monday, May 3, 2021, at noon ET. To learn more about how the program works, refer to the SBA's Restaurant Revitalization Funding Program guide

Additionally, the department will prioritize providing grants to small businesses owned and operated by women, veterans, and/or socially or economically disadvantaged individuals for the first 21 days. To learn more about other ARPA provisions, review this BerniePortal blog.

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