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 US 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 foodservice 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 the 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 foodservice 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?
For the first 21 days of the program, the SBA will give priority to businesses that are at least 51% owned by individuals who are one (or more) of the following:
- Socially and economically disadvantaged
The SBA defines socially disadvantaged individuals as “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.” Likewise, economically disadvantaged individuals are defined by the SBA as “those socially disadvantaged individuals whose 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.”
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 your business is one of the lucky entities that increased revenue from 2019 to 2020, you won’t qualify.
For businesses that opened between January 1, 2020, and March 10, 2021, and for businesses that have not yet opened but which have accrued qualified expenses, the formula for determining the amount you can get is this: The amount spent on eligible expenses between February 15, 2020, and March 11, 2021, minus 2020 gross receipts minus 2021 gross receipts (through March 11, 2021) minus PPP loan amounts.
Businesses that opened partway through 2019 can use either the above formula or the following formula: (Average 2019 monthly gross receipts x 12) minus 2020 gross receipts minus PPP loan amounts.
Eligible expenses include:
- Business payroll costs (including sick leave)
- Payments on any business mortgage obligation
- Business rent payments (note: this does not include prepayment of rent)
- Business debt service (both principal and interest; note: this does not include any prepayment of principal or interest)
- Business utility payments
- Business maintenance expenses
- Construction of outdoor seating
- Business supplies (including protective equipment and cleaning materials)
- Business food and beverage expenses (including raw materials)
- Covered supplier costs
- Business operating expenses
When & How You Can Apply For A Grant
The Restaurant Revitalization Fund grant program is now open. The deadline for applying is May 24, 2021, at 8 PM ET, so all interested businesses should apply ASAP. Visit the SBA’s Restaurant Revitalization Fund page to apply.
The application page contains links to training webinars that detail how to apply, along with a list of all the documentation you’ll need to provide. A phone number is also provided for those seeking direct assistance in preparing their application.