The COVID-19 pandemic put undue stress on the restaurant and hospitality industries, forcing many in the food and drink industry to shutter their doors and count their losses. The last year has forced legislators to address the economic strife of restaurant operators and owners with several rounds of pandemic relief aid and funds, the most recent of which being the Restaurant Revitalization Fund (RRF).
Included as part of the $1.9 trillion relief package signed into law by President Biden in mid-March, the RRF allocates $28.6 billion in emergency assistance to eligible restaurants, bars and other qualifying businesses impacted by COVID-19.
The SBA announced it will begin registrations on Friday, April 30, 2021, at 8 a.m. CDT and open applications on Monday, May 3, 2021 at 11 a.m. CDT. The online application will remain open to all eligible establishments until the SBA closes the portal on Monday, May 24, 2021. If you have yet to submit, get in your application prior to the portal closing on May 24, at 7 p.m. CDT.
This program will provide restaurants with tax-free funding equal to their pandemic-related revenue loss up to $10 million per business and no more than $5 million per physical location. The grant is calculated by subtracting 2020 gross receipts from 2019 gross receipts.
Funds must be used for allowable expenses by March 11, 2023. Franchisees with fewer than 20 locations are also eligible to apply.
Set Asides and Equitable Distribution
As consistent with other recent COVID-19 aid initiatives, the SBA will be awarding the funds with a focus on equity. The SBA has set-aside $5 billion for applicants with 2019 gross receipts of not more than $500,000; an additional $4 billion set-aside for applicants with 2019 gross receipts of $500,001 to $1,500,000; and lastly, an additional $500 million is set-aside for applicants with 2019 gross receipts less than $50,000.
The SBA will also be awarding funds in phases, based on priority. Priority groups will include small businesses which are at least 51% owned by one or more individuals who are women, veterans or socially/economically disadvantaged. The SBA will accept applications from all eligible applicants, although only process and fund priority group applications during a priority period of the first three weeks after May 3. After this priority period (Day 22 through exhaustion of funds), the SBA will accept and process all applications in the order in which they are received and approved.
Establishments which have experienced revenue loss due to the on-going pandemic are eligible for the RRF grant. Such establishments include: restaurants; food stands, trucks or carts; catering institutions; bars, saloons and taverns; and snack or nonalcoholic beverage bars.
Additionally, bakeries, brewpubs/tasting rooms/taprooms, wineries and distilleries, and inns are all eligible as long as onsite sales to the public comprise at least 33% of gross receipts.
Funds must be spent on the following expenses: payroll costs (including sick leave); mortgage payments; rent; utilities; maintenance including construction to accommodate outdoor seating; business supplies, including PPE and cleaning materials; food and beverage expenses; supplier costs; and operating expenses.
How to Prepare For Your Application
Applications will be processed through the SBA-recognized Point of Sale Restaurant Partners or directly via the SBA in an online application portal.
Unlike other recent SBA fund applications, eligible applicants of the RRF will not have to create a SAM.gov account nor will DUNS or CAGE identification numbers be required.
The SBA does recommend taking the following actions prior to your application:
- Register for an account in advance at restaurants.sba.gov beginning Friday, April 30, 2021 at 8 a.m. CDT.
- Review official guidance, including program guide and application sample.
- Preparing required documentation, including verified tax information and banking information; ownership information, gross receipts documentation for 2020 and 2019; and any amounts received for first and second-round PPP loans.
- Work with your POS vender or submit the application directly through the portal when it opens on Monday, May 3.
- Watch this informational webinar from the SBA on how to apply.
The RRF is one of many established aid programs to supplement small businesses in the aftermath of the COVID-19 pandemic. Here’s how these programs will interact with the RRF:
- If an RRF applicant has received a PPP loan, the amount of these loans will affect the funding calculation.
- if an RRF applicant has a pending application for or has received a Shuttered Venue Operators Grant, they are not eligible to apply for RRF.
- EIDL recipients may also apply for RRF.
The SBA also has a dedicated knowledge base and call center to assist in preparing your application. See the RRF knowledge base support documentation and center support: 1-844-279-8898.
If you have questions regarding the RRF, your eligibility or the application process, please reach out to your Trusted Advisor for guidance.