Restaurant Revitalization Fund
Updated May 6, 2021
On March 11, the American Rescue Plan Act of 2021 created the $28.6 billion Restaurant Revitalization Fund to provide grants for restaurants sustaining financial losses due to the COVID-19 pandemic.
The U.S. Small Business Administration (SBA) is administering the program, and will be issuing the necessary federal rules, regulations, and applications before grant funds are distributed.
On April 27, 2021, the SBA officially announced new details on the Restaurant Revitalization Fund (RRF) and the timeline for applications. Registration for the application will begin Friday, April 30, 2021 at 9:00AM ET and applications will officially open on Monday, May 3, 2021 at 12:00PM ET.
- SBA - Restaurant Revitalization Fund Website
- Step-by-Step Guide | Created by the National Restaurant Association
- SBA Form 3172 | Restaurant Revitalization Funding Application Sample
- Frequently Asked Questions | Created by the National Restaurant Association
- SBA RRF Program Guide
- Form 4506-T | Request for Transcript of Tax Return
- National Restaurant Association's RRF Website
Who is eligible for RRF grants?
Most American restaurants and bars that lost revenue in 2020 versus 2019 will be eligible to apply for RRF grants. The ARPA explicitly names the following types of establishments that should be eligible: “restaurant, food stand, food truck, food cart, caterer, saloon, inn, tavern, bar, lounge, brewpub, tasting room, taproom, licensed facility or premise of a beverage alcohol producer where the public may taste, sample, or purchase products.”
However, any restaurant or bar that is part of a publicly-traded company or owned by a state or local government is not eligible to apply. Also, owners that operate more than 20 restaurants are ineligible. Notably, if you are the owner of a franchise and you do not control more than 20 locations, you are likely eligible to apply.
How and when can I apply?
The Small Business Administration (SBA) will administer and disperse the RRF grants.
Registration for the application will begin Friday, April 30, 2021 at 9:00AM ET and applications will officially open on Monday, May 3, 2021 at 12:00PM ET.
For more information: SBA’s COVID-19 relief options web portal.
How much can I get from the grant program?
Generally speaking, restaurants can apply for grants that are equal to 2020 gross revenue minus 2019 gross revenue. For businesses in operation for all of 2019 and 2020, the maximum grant size will be $5 million for restaurants and $10 million for restaurant groups. Grant funds will not be taxed like income.
If a restaurant was not operating for all of 2019, the maximum grant value is the average monthly gross receipts in 2020 minus the average monthly gross receipts in 2019. If a restaurant was not in operation for all of 2020, it could potentially receive a grant that totals the amount of “eligible expenses” put into the business to date.
The SBA will release more information later to clarify the amount restaurants established after January 2019 can apply for and how it may adjust grant amounts based on “relative local costs.”
What can grant funds be used for?
The RRF grants are only able to be used on specific expenses. These include:
- Payroll costs.
- Payments of principal or interest on any mortgage obligation.
- Rent payments, including rent under a lease agreement.
- Maintenance, including new outdoor seating construction.
- Supplies, including PPE and cleaning materials.
- Food and beverage inventory.
- Covered supplier costs.
- Operational expenses.
- Paid sick leave.
- Any other expense SBA says is essential to maintain operations.
The “covered period” for what expenses can be paid by the grant must be incurred between February 15, 2020, to December. 31, 2021.