We are reaching out today because we want to make sure you are aware of the opportunity that this fund may present for you and your business.
The coronavirus pandemic has been especially difficult for businesses in the restaurant industry because much of the stimulus legislation was not structured in a way that allowed these businesses to participate. In response to this, the American Rescue Plan Act (ARPA) included targeted aid for the restaurant sector: a $25 billion Restaurant Revitalization Fund.
We are reaching out today because we want to make sure you are aware of the opportunity that this fund presents for you and your business. We put together a quick FAQ covering the items included in this portion of the most recent stimulus legislation.
Read on to learn about what the fund entails, what the eligibility requirements are, and how to apply.
What is the Restaurant Revitalization Fund (RRF)?
The RRF makes funds available specifically to businesses in the restaurant sector. Of the $28.6 billion allocated to the RRF, $5 billion is earmarked for eligible businesses whose 2019 gross receipts were less than $500,000; the remaining funds are allocated for eligible businesses of various sizes, based on their annual gross receipts. The maximum RRF grant size is $10 million and is limited to no more than $5 million per business location.
How are grants amounts determined?
The grant amount calculation varies, depending on when the business was in operation:
- For businesses that operated for all of 2019, the grant amount will be the decline in 2020 revenue; i.e. the difference in gross receipts between 2019 and 2020.
- For businesses that operated for part of 2019, the grant amount will be the difference between average gross receipts for 2019 and 2020.
- For businesses that operated only in 2020, the grant amount will be equal to eligible expenses minus gross receipts.
- For businesses not yet in operation as of the RRF application, but that have already incurred eligible expenses, the grant amount will be equal to the amount of eligible expenses.
What are the eligibility requirements for receiving RRF money?
- The business must have been open on February 15, 2020
- The business must qualify as one of the following:
- Food stand, truck, or cart
- Saloon or inn
- Tavern, bar, or lounge
- Brewpub, tasting, or taproom
- Licensed facility or a premise of a beverage alcohol producer where the public may taste, sample, or purchase products
- Other similar businesses where the public or patrons assemble for the primary purpose of being served food or drink
- Please note: businesses in these categories that operate in airport terminals or are Tribally owned do qualify
- The business must not meet any of the following criteria:
- Be owned by a state or local government
- Operate more than 20 locations
- Be a publicly traded company
- The business must demonstrate both that:
- The uncertainty of economic conditions makes the grant a necessary support to ongoing business operations; and
- The business has neither applied for nor received a grant under the Economic Aid to Hard-Hit Business, Nonprofits and Venues Act.
- Women and minority owned businesses will receive approval priority.
What expenses qualify as eligible expenses?
Eligible expense are those incurred between February 15, 2020 and December 31, 2021. They include:
- Payroll expenses
- Mortgage principal and interest payments (no principal prepayment allowed)
- Rent expenses (no rent prepayment allowed)
- Utility payments
- Maintenance expenses, including construction in order to allow the business to operate outdoors (e.g., outdoor seating, walls, floors, deck surfaces, furniture, fixtures, and equipment)
- Supply costs, including personal protective equipment and cleaning materials
- Food and beverage expenses
- Operational costs
- Paid sick leave
- Other essential expenses as determined by the Small Business Administration administrator
How do we apply?
Applications are made directly with the SBA (not with your bank.) As of the date of this communication, the RRF application portal with the SBA is not yet open. Please check the SBA’s website often to monitor the application process. You can sign up for email notifications. COVID-19 guidance & resources (sba.gov)
Please know that we are monitoring this situation closely and are prepared to help you apply for an RRF grant when the time comes.
Feel free to reach out to your HAC accounting advisor with any questions.