More Details About the Small Business Administration Restaurant Revitalization Fund Grant Program | Rosenberg Martin Greenberg LLP

The American Rescue Plan Act established the Restaurant Revitalization Fund (RRF), which will provide funding for restaurants and other eligible food and drink establishments. Eligible businesses generally include restaurants, food stands, food trucks, food carts, caterers, bars, saloons, lounges, snack and beverage bars, and various other businesses. Applicants operating bakeries, brewpubs, tasting rooms, taprooms, breweries, microbreweries, wineries, and distilleries must provide documentation establishing that on-site sales to the public represented at least 33% of gross revenues in 2019. Similarly, inns must provide documentation showing that onsite sales of food and beverage to the public represent at least 33% of gross receipts for 2019.

The RRF generally will provide eligible businesses with funding equal to their lost revenues from COVID-19, up to $10 million per business ($5 million per physical location), as measured by the reduction gross revenues from 2019 to 2020. There is a minimum benefit of $1,000, and any RRF grant amount will be reduced by any Payroll Protection Program (PPP) loans an applicant has received. RRF grant recipients are not required to repay the funding as long as they use the funds for eligible expenses on or before March 11, 2023.

Eligible expenses generally include the following:

  • business payroll costs, including sick leave and costs related to the continuation of group health care, life, disability, vision, or dental benefits during periods of paid sick, medical, or family leave, and group health care, life, disability, vision, or dental insurance premiums;
  • business mortgage payments (excluding prepaid principal);
  • business rent payments (excluding prepaid rent);
  • business debt service (excluding prepaid principal or interest);
  • payments for utilities used in the ordinary course of business for which service began before March 11, 2021.
  • business maintenance expenses;
  • construction of outdoor seating;
  • business supplies, including protective equipment and cleaning materials;
  • business food and beverage expenses, including raw materials for beer, wine, or spirits;
  • certain payments made to suppliers; and
  • necessary and mandatory expenses incurred through normal business operations (e.g. rent, equipment, supplies, inventory, accounting, training, legal, marketing, insurance, licenses, fees). Expenses that occur outside of a company’s day-to-day activities are not eligible.

The SBA has released a sample application (SBA Form 3172). In addition to demonstrating that they meet the eligibility requirements, applicants must certify in good faith that (i) “current economic uncertainty makes [the] funding request necessary to support the ongoing or anticipated operations of the Applicant,” and (ii) “the Applicant does not have a pending application for and has not received a Shuttered Venue Operator grant from SBA.” The SBA likely will update the application and the related guidance before it begins accepting applications.

For the first 21 days of the program, the SBA will accept applications from all eligible applicants but will only distribute funds for approved applications for applications that have self-certified that they qualify as small business concerns owned by women, veterans, or socially and economically disadvantaged individuals. After that 21-day period, the SBA will accept applications from all eligible applicants and distribute funds in the order in which applications are approved by the SBA.

Applicants should begin gathering the relevant documentation and information so they can apply as quickly as possible once the SBA begins accepting applications. RMG will continue to monitor developments on this program. In the meantime, contact us for additional details and recommendations.