It’s no secret that restaurants were one of the hardest-hit industries during the COVID-19 pandemic. The newly passed American Rescue Plan Act aims to help restaurants, bars and related businesses with a new grant program called the Restaurant Revitalization Fund.
The RRF will offer $28.6 billion in grants to hard-hit restaurants and bars, with restaurants able to apply for grants based on lost revenue. Additionally, $5 billion of that total will be set aside expressly for businesses with 2019 gross receipts of less than $500,000.
Here’s what you ned to know.
Who’s eligible: Most American restaurants and bars that lost revenue in 2020 versus 2019 will be eligible to apply for RRF grants. These include “restaurant, food stand, food truck, food cart, caterer, saloon, inn, tavern, bar, lounge, brewpub, tasting room, taproom, licensed facility or premise of a beverage alcohol producer where the public may taste, sample, or purchase products.”
Grants from the Restaurant Revitalization Fund over an initial 21 days are also expected to be prioritized for small businesses controlled by women, veterans or “socially and economically disadvantaged small business concerns,” according to the National Restaurant Association said.
Who’s not eligible: Any restaurant or bar that is part of a publicly-traded company or owned by a state or local government is not eligible to apply. Also, owners that operate more than 20 restaurants are ineligible. Of you are the owner of a franchise and you do not control more than 20 locations, you are likely eligible to apply.
How to apply: The Small Business Administration (SBA) will administer and disperse the RRF grants, but the program does not yet have an official launch date as of this writing but it is expected in the next couple of weeks. Watch this space: SBA’s COVID-19 relief options web portal.
How much relief: Generally speaking, restaurants can apply for grants that are equal to 2020 gross revenue minus 2019 gross revenue. For businesses in operation for all of 2019 and 2020, the maximum grant size will be $5 million for restaurants and $10 million for restaurant groups. Grant funds will not be taxed like income.
If a restaurant was not operating for all of 2019, the maximum grant value is the average monthly gross receipts in 2020 minus the average monthly gross receipts in 2019. If a restaurant was not in operation for all of 2020, it could potentially receive a grant that totals the amount of “eligible expenses” put into the business to date.
The SBA will release more information to clarify the amount restaurants established after January 2019 can apply for and how it may adjust grant amounts based on “relative local costs.”
Uses of funds: The funds can be spent on payroll, mortgage principal and interest, rent, utilities, maintenance, construction for outdoor seating, protective equipment, cleaning supplies, paid sick leave and normal food and beverage inventory. The “covered period” for what expenses can be paid by the grant must be incurred between February 15, 2020, to December. 31, 2021.
READ STORIES OF COVID RESILIENCY ON GROWBIZ