April 30, 2021
On March 11, 2021, Congress passed the American Rescue Plan Act, which included a $28.6 billion Restaurant Revitalization Fund (“RRF”) to be administered by the U.S Small Business Administration (“SBA”). The RFF will provide tax-free grants to restaurants and other dining and drinking establishments to assist them with revenue losses resulting from the pandemic The RFF provides eligible restaurants and other food establishments the opportunity to obtain tax-free federal grants of up to $10 million to replace the loss of revenues from this unprecedented time.
Registration for RFF applicants on the SBA’s portal began on Friday, April 30, 2021. The SBA began accepting applications from all applicants beginning on Monday, May 3, 2021, but will only process and fund applications from priority groups during the first 21 days. Priority groups are small businesses that are at least 51 percent owned by one or more individuals who are: (i) women, (ii) veterans, or (iii) socially and economically disadvantages individuals.
The SBA has released a Program Guide dated as of April 28, 2021 on its website that breaks down the various requirements of the RFF, including among others, eligibility (listing criteria for both eligible and ineligible entities), calculation of funding amount, eligible uses of funds, and timeframe for using funds. A sample of the application is also available on the SBA website.
The Program Guide describes eligible entities as businesses that are not permanently closed where the public or patrons assemble for the primary purpose of being served food or drink, including the following:
- Food stands, food trucks, food carts
- Bars, saloons, lounges, taverns
- Licensed facilities or premises of a beverage alcohol producer where the public may taste, sample, or purchase products
- Other similar places of business in which the public or patrons assemble for the primary purpose of being served food or drink
- Snack and nonalcoholic beverage bars
- Brewpubs, tasting rooms, taprooms*
- Breweries and/or microbreweries*
- Wineries and distilleries*
We encourage these businesses to review the Program Guide and other information provided by the SBA as soon as possible and, to the extent necessary, seek the assistance of the SBA and other licensed professionals to assist them with determining their eligibility for submission of an application. With the 21-day priority period ending May 23, 2021 and because the grants will only be available until the funds are exhausted, we recommend that you apply as soon as possible.
* In order to be eligible, these businesses must provide documentation with their application that on-site sales to the public comprised at least 33% of gross receipts in 2019. For businesses which opened in 2020 or that have not yet opened, the Applicant’s original business model should have contemplated at least 33% of gross receipts in on-site sales to the public.
** To be eligible, these businesses must provide documentation with their application that on-site sales of food and beverage to the public comprised at least 33% of gross receipts in 2019. For businesses who opened in 2020 or that have not yet opened, the Applicant’s original business model should have contemplated at least 33% of gross receipts in on-site food and beverage sales to the public.
The foregoing is only a preliminary look at the RFF program and additional information is available and should be obtained from the SBA.