Restaurant Revitalization Fund opens May 3rd
Covid-19 Relief | Apr 28, 2021
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Introduced in the American Rescue Plan Act (ARPA), the Restaurant Revitalization Fund (RRF) was established to provide much needed financial relief to restaurants.
The RRF will provide restaurants with funding equal to their pandemic-related revenue loss up to $10 million per business and no more than $5 million per location. As long as the funds are used for eligible expenses no later than March 11, 2023, recipients are not required to repay it.
The RRF will accept applications beginning on Monday, May 3, 2021.
While all eligible entities will be permitted to apply, the Small Business Administration (SBA) will focus initially on any applications from a defined priority group. This priority group window will last for the first 21 days of the program. Then, beginning on day 22 and going until the funding is exhausted, the SBA will process the remaining applications.
The initial priority group consists of any small business that is at least 51 percent owned by women or veterans or the socially and economically disadvantaged.
The SBA defines socially and economically disadvantaged individuals as follows:
Socially Disadvantaged Individuals
Those who have been “subjected to racial or ethnic prejudice or cultural bias because of their identity as a member of a group without regard to their individual qualities.”
Economically Disadvantaged Individuals
Those individuals who are “socially disadvantaged whose ability to compete in the free enterprise system has been impaired due to diminished capital and credit opportunities as compared to others in the same business area who are not socially disadvantaged.”
The following businesses that have experienced pandemic-related losses qualify for the RRF:
- Food stands, food trucks, and food carts
- Bars, saloons, lounges, and taverns
- 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 businesses are eligible, provided onsite sales to the public comprise at least 33% of their gross receipts:
- Brewpubs, tasting rooms, and taprooms
- Breweries and microbreweries
- Wineries and distilleries
- *Inns - onsite sales of food and beverage to the public must comprise at least 33% of gross receipts
What are eligible expenses?
Funds received from the RRF may be used for the following expenses:
- Business payroll costs, including sick leave
- Payments on any business mortgage obligation
- Business rent payments (this does not include prepayment of rent)
- Business debt service (both principal and interest; this does not include any prepayment of principal or interest)
- Business utility payments
- Business maintenance expenses
- Construction of outdoor seating
- Business supplies (including protective equipment and cleaning materials)
- Business food and beverage expenses (including raw materials)
- Covered supplier costs
- Business operating expenses
How to apply
There are two ways that a restaurant can apply for funding:
Point of Sale Vendors
Eligible businesses can apply through any of these participating POS vendors:
- NCR Corporation
Eligible businesses can use the SBA application portal.
What information you need
Regardless of how you apply, you should make sure you have the following information readily available:
- Verification for tax information (IRS Form 4506-T, completed and signed by the applicant)
- Documentation regarding your gross receipts and eligible expenses, such as:
- Business tax returns (IRS Form 1120 or IRS 1120-S)
- IRS Forms 1040 Schedule C
- IRS Forms 1040 Schedule F
- Bank statements
- Income statements
- Profit and loss statements
- IRS Form 1065, including K-1s (for partnerships)
- Point of sale reports, including IRS Form 1099-K
For More Information
The SBA has several resources available regarding the RRF:
Disclaimer: This is simply a summary of the Restaurant Revitalization Fund. This does not constitute legal advice. Always check with your own legal and/or financial advisors as to how this program and others may apply to you or your business.