The American Rescue Plan Act of 2021 establishes a $28.6 billion Restaurant Revitalization Fund within the SBA, which will provide eligible business with a tax-free federal grant based on revenue decline.
What Businesses are Eligible?
- Eligible businesses include restaurants, food stands, food trucks, food carts, caterers, saloons, inns, taverns, bars, lounges, brewpubs, tasting rooms, taprooms, licensed facilities or a premise of a beverage alcohol producer where the public may taste, sample, or purchase products, or other similar businesses where the public or patrons assemble for the primary purpose of being served food or drink.
- Own or operate 20 or fewer establishments (together with any affiliated business).
- If you are applying for SVOG, you would not be eligible for the Restaurant Grant.
How Much Will I receive?
- Business Operating prior to 2019: Restaurant Grant = 2019 Gross Receipts – 2020 Gross Receipts – PPP Round 1 – PPP Round 2
- New Business in 2019: Revenue for 2019 will be annualized based on the monthly average
- New Business in 2020 or 2021: Restaurant Grant = Payroll Costs – 2020 & 2021 Gross Receipts – PPP Round 1 – PPP Round 2
- Business has not yet opened: Restaurant Grant = Payroll Costs incurred prior to opening
A single location is eligible to receive up to $5 million and affiliated groups are capped at $10 million between all entities. It has not yet been confirmed by the SBA what documents will be needed to prove revenue decline. As we saw in PPP, we were able to choose between tax returns, signed financial statements, and POS statements.
What Can Grants Be Used For?
- Virtually anything related to operating your business, including payroll costs, rent, utilities, maintenance expenses (including construction and furnishing cost of outdoor seating), supplies (including PPE and cleaning materials), food and beverage expenses, administrative, professional fees, etc.
- Grants can be spent on (or reimbursed for) eligible expenses from 2/15/20 through 12/31/21; however, the SBA may also extend the period up to two years.
- Any amounts not spent by the 12/31/21 (or the date the SBA ultimately decides) must be returned.
- Wages that are used to claim ERC cannot be considered an eligible expenditure for grant funds.
What Can I do to get ready to apply?
As the SBA works on building the application platform, it would be in your best interest to register for a DUNS number so you can then register in the System for Award Management (SAM.gov). We have included step-by-step instructions on how to register for each here.
The SBA will be releasing more information on this in upcoming weeks. We are not expecting the application to be open until late-April through June.