The American Rescue Plan Act passed into law on March 11, 2021, established the $28.6 billion Restaurant Revitalization Fund (the “Fund”), which is to provide federal grants to certain eligible entities. The Small Business Administration, which is administering the Fund, has created a program guide HERE, which details eligibility requirements, how to calculate the funding amount to which one is entitled, use of the funds, and how to apply. A few of these items are summarized below.
Which entities are eligible?
Generally, an entity is eligible to receive funds if it is not permanently closed and it is a business where the public or patrons assemble for the primary purpose of being served food or drink. These types of businesses include, without limitation, restaurants, bars, food trucks, caterers, lounges, and taverns. Other businesses such as bakeries, brewpubs, tasting rooms, taprooms, breweries, microbreweries, wineries, and distilleries may also be eligible if such business can provide documentation that on-site sales to the public comprised at least 33% of gross receipts in 2019. On-site sales include carry-out and delivery orders.
How much funding can an entity receive?
An eligible entity can receive its “pandemic-related revenue loss”, which is defined as the entity’s gross receipts from 2020 subtracted from its gross receipts from 2019. Gross receipts should not include any amounts received from a Paycheck Protection Program loan, an SBA Economic Injury Disaster Loan, EIDL advance or any other state and/or local small business grants. The maximum amount that can be received by an entity and its affiliates is $10 million; however, that is limited to $5 million per physical location of the eligible entity.
How can an eligible entity use the funds?
Funds can be used for the following expenses:
- Payroll costs
- Payments on mortgage obligations
- Maintenance expenses (including expenses for construction of outdoor seating)
- Supplies (including personal protective equipment and cleaning materials)
- Food and beverage expenses (including raw materials for beer, wine, or spirits)
- Covered Supplier Costs
- Operational expenses
- Paid sick leave
All funds must be used by March 11, 2023, on eligible expenses, or the funds must be returned to the SBA. Since this is a grant of federal funds, there is no forgiveness process; however, applicants are required to report annually to the SBA how much of the funds have been used for each eligible category until such time as all funds are used.
How does an entity apply?
There are three ways to apply for funds as follows:
- Through a recognized SBA Point-of-Sale Restaurant Partner (i.e. Clover, NCR Corporation, Square, Toast, etc.)
- Directly through the SBA at sba.gov
- By Telephone at (844) 279-8898
Registration on the SBA website begins April 30, 2021, at 9am EST, and submission of applications starts on May 3, 2021, at 12pm EST.
Please give your BoyarMiller attorney a call if we can help answer any questions regarding the Restaurant Revitalization Fund or any other government stimulus program for small and middle market businesses.