First 3 weeks of program prioritizes applications from businesses owned by women, veterans, and socially and economically disadvantaged individuals.
Overview of the Program
The American Rescue Plan Act, passed in 2021 to offer additional pandemic relief to individuals and businesses, included $26 Billion for the Restaurant Revitalization Fund (RRF). This fund was set up to assist restaurants impacted by Covid-19 mandatory shutdowns and loss of revenue. The program is intended to provide restaurants and other eateries with funding equal to their pandemic-related revenue loss up to $10 million per business, but no more than $5 million per location. Funds received from the RRF and used for eligible expenses are not required to be repaid by recipients.
The program is administrated and funded directly through the Small Business Administration. The application portal opened on the SBA website on May 3, 2021. The first 21 days of program will prioritize applications from businesses owned by women, veterans, and socially and economically disadvantaged individuals. The National Restaurant Association has indicated the fund will run out “in a matter of weeks- possibly only a few”. Funds are available on a first-come first-served basis. The Fund is not currently set up to allocate funds to all applications received and there is no additional funding plan in place. This underscores the importance of completing the required application and documentation as soon as possible to ensure your business is in line to receive funding.
Eligibility and Use of Restaurant Revitalization Funds
Restaurant and eateries that have experienced pandemic-related revenue losses are eligible for RRF funds.
Some specific businesses that qualify are:
- Food Stands
- Food Trucks
- Bars and Taverns
- Other licensed facilities that are open to the public and provide food and beverages for consumption.
For businesses that have revenues from both onsite sales of food and beverage and other revenue sources, such as a bakery that provides both onsite products and offsite catering/delivery, onsite sales to the public must comprise at least 33% of gross receipts.
What’s Covered and What Isn’t
RRF funds may be used for a variety of expenses related to operations and Covid-19 mitigation. Specific expenses eligible are payroll costs, rents, utilities, food and beverage expenses. Covid-19 mitigation expenses covered by RRF funds include construction of outdoor seating and personal protective equipment (PPE) and cleaning supplies and services. Additionally, debt service, including principal and interest, for business debt is an eligible expense.
Notably, expansion costs, such as construction of additional indoor areas and new equipment are not eligible expenses for RRF funds.
Application and Funding Timeline
Applications opened on May 3, 2021 at can be found HERE. All applications are being accepted, but the SBA will only distribute funds to applications who self-certify as a small business owned and controlled AT LEAST 51% by women, veterans, or socially and economically disadvantaged individuals. Per 13 CFR § 124.103, socially disadvantaged businesses are 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 per 13 CFR § 124.104 are those socially disadvantaged individuals who 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.
Funding for priority applications ends after 21 days, after which the SBA will start distributing funds in the order in which the applications are approved by the SBA. Even if you are not eligible for the priority application period, it is important to get the application in as soon possible to ensure funding is still available.
There are additional provisions for small businesses not part of the priority groups. There is $5 billion set aside for applications with 2019 gross receipts of $500,000 or less and $4 billion for applicants with 2019 gross receipts between $500,001 and 1,500,000.
Applications should be completed through the SBA website. Through their online application system, applications and required documentation will be processed and a first come first serve basis. The SBA is also partnering with point-of-sale providers Square and Toast to process applications directly through their point of sale systems.
If you have questions on this or other funds available for your business, please contact DHJJ.