In an effort to help restaurants and bars recover from the financial impacts of COVID-19, $25 billion of the American Rescue Plan is allocated for a Restaurant Revitalization Fund (RRF). While we await further guidance from the SBA, find out the basics of the RRF below and see if your business is eligible for grant funding.
Who is eligible for Restaurant Revitalization Funding?
The American Rescue Plan outlines that businesses in which the public assemble for the primary purpose of being served food and drink are eligible. The Plan indicates that the following food and beverage establishments are eligible:
- Food stands
- Food trucks and carts
- Brewpubs, tasting rooms and taprooms
- Other similar places of business in which the public or patrons assemble for the primary purpose of being served food or drink
Businesses that are state or local government-operated, publicly traded or have 20 locations or more are not eligible. Those who have already applied for the Shuttered Venue Operators Grant are also ineligible for RRF funding.
How much can I apply for out of the Restaurant Revitalization Fund?
Through the RRF, eligible establishments will be able to apply for a grant equal to their pandemic-related revenue loss, up to $10 million per entity or $5 million per location, limited to 20 locations. Grants will be calculated by subtracting 2020 revenue from 2019 revenue.
Those businesses that have received PPP (round 1 or 2) funding will be eligible for an RRF grant, but the RRF grant total will be reduced by the amount of the PPP loan(s). EIDL loans and Employee Retention Tax Credit funding does not impact RRF funding.
For those establishments not operating for all of 2019, the maximum grant is the average monthly gross receipts in 2020 minus the average monthly gross receipts in 2019. Similar to PPP loan forgiveness, the RRF grant will not be taxable income and all associated expenses will be tax-deductible.
What can an RRF grant be used for?
Grant funding does not have to be paid back if it is used for eligible expenses from 2/15/20 through 12/31/21, including:
- Payroll costs
- Payments of interest or principal on any mortgage obligation
- Rent and utilities
- Maintenance expenses
- Supplies and PPE
- Food and beverage expenses
- Covered supplier costs, as defined for PPP purposes
- Operational expenses
- Paid sick leave
How can I apply for the RRF?
While we are waiting on the SBA to release further guidance on the RRF application process, business owners should take a few steps to prepare:
- Gather the financial data from 2020 and 2019 to show revenue loss.
- Create an account on login.gov. This will be needed in step four.
- Obtain a Data Universal Number System (DUNS) number. This is required for businesses seeking federal grants and may take a day or two to process.
- Register with the System for Award Management (SAM) using your login.gov email and DUNS number.
You will not be able to apply or receive payments without establishing your business in these systems, so it’s important to be prepared and establish early. The application process is expected to open in early April, with the first 21 days being prioritized for women-owned, minority-owned and veteran-owned businesses.
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