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.
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.
The SBA states that eligible entities include the following:
The following must have public on-site sales of food and beverage comprise at least 33% of gross receipts for eligibility:
Some disqualifying factors for the RRF include:
The SBA explained that grant funding can be used to cover any of the following:
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.
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:
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:
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.
A 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.