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ComplianceMay 04, 2021

The Restaurant Revitalization Fund provides assistance for restaurants suffering COVID-19 related losses

Restaurants and other food service businesses were among the hardest hit by COVID-19. In order to provide funding to these businesses, the American Rescue Plan Act established the Restaurant Revitalization Fund (RRF). The RRF is a $28.6 billion program established to provide eligible businesses with grants of up to $10 million per business and no more than $5 million per physical location. Recipients are not required to repay the funding as long as the funds are used for eligible purposes no later than March 11, 2023.

The RRF is administered by the Small Business Administration. Unlike the Paycheck Protection Program, banks and financial institutions are not involved in distributing the funds. The SBA began accepting applications for RRF grants on May 3, 2021.

What businesses are eligible for the RRF?

Eligible businesses who have experienced pandemic-related revenue loss include the following:

  • Restaurants
  • Food stands, food trucks, and food carts
  • Caterers
  • Bars, saloons, lounges, and taverns
  • Snack and nonalcoholic beverage bars
  • Bakeries, brewpubs, tasting rooms, taprooms, breweries, microbreweries, wineries, and distilleries at which on-site sales to the public comprise at least 33% of the gross receipts
  • Inns at which on-site sales of food and beverages to the public comprise at least 33% of gross receipts
  • Licensed facilities or premises of a beverage alcohol producer where the public may sample or purchase products

Permanently closed businesses, nonprofit organizations, and public traded companies are not eligible.

How can restaurants and other eligible businesses apply?

Eligible businesses can apply through a Small Business Administration recognized Point of Sale Restaurant Partner or directly via the SBA through its online application portal, which opened May 3.

SBA Form 3172 is the application form. Additional documentation is required, including documents to verify tax information, to document gross receipts, and to evidence that the onsite sales to the public constituted 33% of gross receipts where applicable.

From the first day the program opens through the 21st day, the SBA will accept applications from all eligible businesses but will process and fund priority group applicants. A priority group applicant is a small business concern that is at least 51 percent owned by one or more individuals who are women, veterans, or socially and economically disadvantaged. Applicants must self-certify on the application that they meet eligibility requirements.

From day 22 through the exhausting of funds, the SBA will accept applications from all eligible applicants and process applications in the order in which they are approved by the SBA.

How much can eligible businesses receive

The SBA may provide funding up to $5 million per location, not to exceed $10 million total for the applicant and any affiliated businesses. The minimum award is $1,000.

The payment calculations

The payment calculations are as follows:

  • Calculation 1. For applicants in operation before or on January 1, 2019. Gross receipts for 2019 minus 2020 gross receipts minus PPP loan amounts.

  • Calculation 2. For applicants that began operations partially through 2019. Average 2019 monthly gross receipts (multiplied by 12) minus 2020 gross receipts minus PPP loan amounts.

  • Calculation 3. For applicants that began operations on or between January 1, 2020, and March 10, 2021, and applicants not yet opened but have incurred eligible expenses. 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.

Entities that began operations partially through 2019 may elect to use either Calculation 2 or Calculation 3.

What can the funds be used for?

RRF funds may be used for specific expenses including the following:

  • Business payroll costs
  • Payments on any business mortgage obligation
  • Business rent payments
  • Business debt service
  • Business utility payments
  • Business maintenance expenses
  • Construction of outdoor seating
  • Business supplies (including protective equipment and cleaning materials)
  • Business food and beverage expenses
  • Covered supplier costs
  • Business operating expenses

The application portal, as well as more information on the RRF, can be found on the SBA’s website.                                                                                      

Sandra Feldman
Publications Attorney
Sandra (Sandy) Feldman has been with CT Corporation since 1985 and has been the Publications Attorney since 1988. Sandy stays on top of the most pressing and pertinent business entity law issues that impact CT customers of all sizes and segments.
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