SBA Restaurant Revitalization Fund Grants For Food Service Businesses: 2021 Guide
Remember when some people hoped the COVID-19 pandemic lockdowns would be over in a few weeks? Well, after a year of lockdown restrictions and the associated economic stress, many small businesses have struggled to keep their doors open.
One particularly hard-hit small business segment is food service. Over 110,000 restaurants in the U.S. were taken out of commission in 2020, many of them permanently.
While restaurants and bars could apply for PPP and EIDL loans previously, there is now a program aimed specifically at them that can potentially offer more money and with better terms (hint: free).
Let’s take a closer look at the new Restaurant Revitalization Fund (RRF), who is eligible for it, and what applicants can expect from the process.
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What Is The Restaurant Revitalization Fund?
The American Rescue Plan Act was signed into law on March 11, 2021. While it provided additional funds for existing COVID-relief programs, it also introduced a brand new avenue for financing: the Restaurant Revitalization Fund (RRF). This fund sets aside $28.6 billion in grants to qualified food service establishments to offset the costs/losses related to lockdown restrictions.
The RRF offers up to $10 million in grant money to food-oriented businesses as long as they meet eligibility requirements.
Restaurant Revitalization Fund Eligibility Requirements
As the RRF is a targeted program, applicants will need to meet a number of qualifications if they hope to get a grant.
First, you’ll need to be in the food service business — meaning that the main reason people come to your business is to buy food and/or drink. That covers restaurants, food trucks, bars, pubs, breweries, and similar businesses. The operative word here is “main.” If you’re just selling refreshments for a ticketed event, you may not qualify (and may want to look into the Shuttered Venue Operator Grant instead).
Who Is Ineligible For An RFF Grant?
The Restaurant Revitalization Fund Grant is targeted at smaller, private foodservice businesses. There are a number of businesses that won’t qualify for an RFF grant. These are:
- A business that has applied for or received a Shuttered Venue Operators grants (SVO)
- Publicly traded companies
- Government-owned businesses
- A business with more than 20 locations
When Do I Have To Have Been In Business To Get A Restaurant Revitalization Fund Grant?
Interestingly, unlike most COVID-related programs, the RRF grant is available to businesses that opened after February 2020. In fact, even restaurants that haven’t technically opened yet can qualify so long as they’ve incurred expenses between February 15, 2020, and December 31, 2021 (at the SBA’s discretion, this may be extended to February 15, 2022).
Who Has Priority For The Restaurant Revitalization Fund Grant?
The RRF will ultimately be first-come, first-serve, however, the first 21 days of the program will give priority to businesses that are identified as socially or economically disadvantaged. The SBA hasn’t yet released guidance for how this will work, but it’s likely this will mean women, minority, and veteran-owned businesses, and possibly also businesses that are located in economically disadvantaged areas.
Can I Get Both A PPP Loan And A RFF Grant?
There’s both good and bad news on this front.
First the good news: you can get both a PPP loan and an RRF grant. Additionally, EIDL loans do not count against the amount of money you can receive through the RRF.
The bad news? Your PPP loan will count against the amount of grant money you can receive through the RRF.
What Eligible Businesses Can Get From The RRF
The RRF uses a slightly different formula depending on whether you were in business in 2019, opened in 2020, or have yet to open. RRF grants are capped at $10 million per applicant or $5 million per location. Restaurant Revitalization Grants will not be considered income for tax purposes.
For restaurants that operated throughout 2019, the amount of money you can get from an RRF grant is equal to the reduction in revenue you suffered between 2019 and 2020. Remember that PPP loan money is subtracted from this number. If you’re one of the lucky entities that increased their revenue from 2019 to 2020, you won’t qualify.
Businesses that opened in 2020 can get funding based on eligible expenses minus gross receipts. The SBA will release guidance on how exactly this will work in the coming weeks.
If your business isn’t yet open, but you’ve accrued qualified expenses, you can get an RRF grant equal to those expenses. As in the previous scenario, guidance will be released in the coming weeks.
Eligible expenses will include:
- Mortgage obligations
- Outdoor seating accommodations
- Protective equipment and barriers
- Cleaning materials
- Food and beverage inventory
- Operational expenses
- Paid sick leave
This list isn’t final and, if existing programs are any indication, will probably get some modifications as time goes on.
When & How You Can Apply For A Grant
The Restaurant Revitalization Fund grant program isn’t open yet. It should be noted that, as of March 22, 2021, the similar SVO grant program still has yet to launch. Nor is there currently a formal data upon which either program will open. This will no doubt be frustrating for restaurants that are hanging on by a thread.
While you can’t currently apply, the SBA has suggested that they will be using the federal government’s System for Award Management to administer the program. You can register with that system now if you think you’ll be applying for a grant when the RRF opens.
Need more information about other COVID relief programs? Check out our guides to: