What to Know About the Restaurant Revitalization Fund and How to Apply
The new 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.
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.
According to a policy briefing issued by the National Restaurant Association, the total grant amount eligible restaurants can receive “is capped at $10 million and is limited to $5 million per physical location of the business” as long as they owned or operated 20 or fewer establishments as of March 13, 2020.
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).
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.
Which Organizations Are Eligible to Receive Funding Through the Restaurant Revitalization Fund?
The National Restaurant Association says that eligible entities include any ...
- Restaurant, Food Stand, Food Truck, Food Cart;
- Snack and Nonalcoholic Beverage Bar;
- Bar, Lounge, Saloon, Tavern;
- An Inn;
- Brewery, Brewpub, Microbrewery, Taproom, Tasting room;*
- A licensed facility or premise of a beverage alcohol producer where the public may taste, sample, or purchase products;
- Other similar places of business in which the public or patrons assemble for the primary purpose of being served food or alcohol.
*There may be limited eligibility for inns, breweries, wineries, bakeries, and distilleries.
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?
Grant funding can be used to pay for the following:
- Payroll costs
- Rent payments
- Mortgage payments (principal and interest)
- PPE and cleaning materials
- Maintenance expenses
- Paid sick leave
- Food and beverage expenses within the normal scope of business
- Other costs established by the SBA
How Can Organizations Apply for Restaurant Revitalization Fund Grants?
While the program hasn’t opened yet, organizations will be able to submit grant applications online through the SBA’s website at SBA.gov. Eligible recipients must use their EIN to register and must submit a good faith certification that the grant request is necessary to support their ongoing operations. Grant funding is calculated by subtracting 2020 gross receipts from 2019 gross receipts.
Additionally, the new fund acknowledges that not every restaurant was operating for the entirety of 2019 and 2020. In these instances, the program says:
- Restaurants that weren’t in operation for the entirety of 2019 can receive a grant equal to the difference between the establishment’s average monthly revenue multiplied by 12.
- Restaurants that weren’t in operation until 2020 can receive a grant equal to the sum of eligible expenses minus gross receipts received.
- Restaurants that aren’t in operation at the time of their application date can still receive grant funding, but only if it has made eligible expenses (and only these are eligible for funding).
Note: This page will be updated as the SBA releases more information about how to apply for grant funding.
When Can Organizations Apply for a Restaurant Revitalization Fund Grant?
The SBA is expected to open applications for the Restaurant Revitalization Fund within weeks of passage of ARPA. To learn more about how the program works, refer to the National Restaurant Association's Restaurant Revitalization Grants FAQ.
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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