The Restaurant Revitalization Fund (“RRF”), Administered By The Small Business Administration, Is Part Of The $1.9 Trillion American Rescue Plan Act Of 2021, Which Was Signed Into Law On March 11, 2021. The RRF Will Offer $28.6 Billion In Grants To Provide Economic Relief To Eligible Restaurants Based On Lost Revenue Resulting From The COVID-19 Pandemic.
Applications for RRF grants are live as of May 3, 2021. The applications can be found by following this link. Since this is a federal grant, administered by a government agency, the application process and requirements are different from the application process for PPP loans, administered by third party lenders.
An eligible entity for an RRF grant is “a 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, and other similar places where the public or patrons assemble for the primary purpose of being served food or drink.”
An eligible entity may receive a grant in an amount up to its “pandemic-related revenue loss.” Broadly speaking, an entity can apply for a grant that is equal to 2019 gross receipts less 2020 gross receipts and the amount of any PPP loan the entity received. The maximum total grant amount an entity can receive is $10 million and is limited to $5 million per location. Further, $5 billion of the $28.6 billion is specifically set aside for entities that had gross receipts of $500,000 or less during 2019. This allocation helps mitigate the competition between smaller entities and larger entities for funding; this was a prominent issue in the first draw of PPP loans.
RFF Specific Expenses
If your entity applies for, and receives an RRF grant, the proceeds can only be used for specific expenses incurred between February 15, 2020 and December 31, 2021. These include:
- Payroll costs;
- Payments of principal or interest on any mortgage obligation;
- Rent payments, including rent under a lease agreement;
- Maintenance (which includes outdoor seating/dining construction);
- Supplies, such as PPE or sanitizing equipment;
- Food and beverage inventory;
- Supplier costs’
- Operational expenses;
- Paid sick leave; and,
- Other expenses the Small Business Administration deems essential to maintain operations.
Along with completing the applications, you will also need to have a completed and signed IRS Form 4506-T. Along with the IRS Form 450-6 T, you will also need to submit documentation that shows your gross receipts. Any of the following documents are acceptable:
- Business tax returns;
- IRS Forms 1040 Schedule C and F;
- Partnership IRS Form 1065 (including K-1s)(for partnerships);
- Bank statements;
- Income statements and/or profit and loss statements; and
- Point of sale report(s), including IRS Form 1099-K.
For more information on the RRF, please visit the RRF page on the SBA’s website. If you have any questions, or need any assistance preparing your application, please do not hesitate to contact us. We are ready to help you get through these trying times. We hope that you and your families are staying safe and healthy.
John D. Galarnyk, Esq.
Andrew J. Cunniff, Esq.
John A. Romanucci, Esq.