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More Information on The Restaurant Revitalization Fund and How to Apply

The American Rescue Plan Act of 2021 (ARPA) is the most recent of the three stimulus bills that have passed since the start of the pandemic. ARPA included a separate relief fund called the Restaurants Act that sets aside $28 billion for a grant program run by the Small Business Administration (SBA).

The program aims to support the food and drinks service industry which was heavily impacted by the pandemic shutdowns. The program, also known as the Restaurant Revitalization Fund (RRF) is still very new with various components to keep in mind if you are considering applying.

Funding Timeline and Amount 

If an applicant is approved, the program will cover the amount an organization lost in revenue due to the pandemic. Organizations will be allowed to use the tax-free funding to cover eligible expenses incurred from February 15, 2020, to December 31, 2021. Funds could be granted up to $5 million per location but may not exceed $10 million total for the applicant or any other affiliated business. The minimum amount awarded is set at $1,000. Additionally, businesses that received funding through the Paycheck Protection Program (PPP) are also eligible for the RRF but the maximum sum of the possible grant funding subtracts the amount borrowed through the PPP.

Eligible Entities

The SBA states that eligible entities include the following:

  • Restaurants
  • Caterers
  • Bars
  • Saloons
  • Lounges
  • Food Stands
  • Food Trucks
  • Food Carts
  • Snack and nonalcoholic beverage bars
  • Licensed facilities or premises of a beverage alcohol producer where the public may taste, sample, or purchase products

The following must have public on-site sales of food and beverage comprise at least 33% of gross receipts for eligibility:

  • Bakeries
  • Breweries
  • Tasting Rooms
  • Taprooms
  • Wineries & Distilleries
  • Inns

Ineligibility

Some disqualifying factors for the RRF include:

  • Publicly traded companies
  • Entities that operate more than 20 locations under the same or different names as of March 13, 2020
  • Entities that are permanently closed
  • Entities that have received a grant or are currently pending an application through section 324 of the Economic Aid to Hard-Hit Small Business, Non-profits & Venues Act
  • State or local government-owned or operated organizations
  • Entities that have filed for bankruptcy under Chapter 7 or are currently liquidating under Chapter 11
  • Companies that do not have a place of business located in the U.S.

Eligible Expenses

The SBA explained that grant funding can be used to cover any of the following:

  • Business mortgage
  • Payroll costs including sick leave
  • Business rent (not including the prepayment of rent)
  • Business utility payments
  • Outdoor seating construction
  • Maintenance expenses
  • Principal and interest on business debt (not including the prepayment of principal or interest)
  • Business supplies
  • Food and beverage expenses including raw materials
  • Operating expenses

If the approved applicant cannot spend the full amount they were awarded or they go out of business before the covered period concludes, they must return the unused funds. Recipients are not required to repay the funds used on covered expenses as long as they are used by March 11, 2023.

How to Apply 

The application goes through the SBA website using Form 3172. Eligible recipients will need to verify tax information using IRS Form 4506-T and submit gross receipts to determine payment calculations. A sample version of the application has been provided by the SBA for interested applicants.

Funding will be determined by the following calculations:

  • Applicants that were in operation for all of 2019 are eligible for a grant that is equal to 2019 gross receipts minus the gross receipts from 2020.
  • If they began operating partially through 2019, they are eligible for a grant that is equal to the average in 2019 gross receipts x12 and minus 2020 gross receipts.
  • If they began operating on or between January 1, 2020, and March 10, 2021, or they have not opened yet but have incurred eligible expenses they are eligible for a grant equal to the amount spent on eligible expenses between February 15, 2020, and March 11, 2021, minus the 2020 gross receipts.

In any of those scenarios, if they received a PPP loan, that amount will be subtracted as well. The SBA also announced that gross receipts should not include:

  • Amount received from a PPP loan.
  • Amount received from Economic Injury Disaster Loans (EIDL)
  • Advances on EIDL.
  • SBA Section 1112 payments.
  • State and local grants

Additionally, the SBA will prioritize grants for small businesses owned and operated by veterans, women, and/or are socially or economically disadvantaged for the first 21 days of opening up the applications. Registration for the SBA application portal will begin on Friday, April 30, 2021, at 9 am ET. Applications will open on Monday, May 3, 2021, at noon ET.

full guide has been provided to the public in anticipation of the opening date. It is always recommended to speak with a trusted partner and professional if you have any additional questions.

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This article provides general information and shouldn’t be construed as legal or HR advice. Since employment laws may change over time and can vary by location and industry, please consult a lawyer or HR expert for advice specific to your business. You can also contact Payroll Systems to inquire about our HR support services.