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Restaurant Revitalization Fund – Help for Independent Restaurants and Bars

03.23.2021

$28.6 billion of grant funds, known as the Restaurant Revitalization Fund (RRF), have been set aside by the American Rescue Plan Act for restaurants and other qualifying food businesses. Grants are capped at $10,000,000 per affiliated group and $5,000,000 per physical location of the eligible entity. The Small Business Administration (SBA) is charged with administering the program and will follow the priority award guideline set forth in the Act. Such guidelines provide priority funding for businesses owned or controlled by women, veterans or the socially and economically disadvantaged (as defined by the Small Business Act) during the initial 21 days of funding.

The SBA is working quickly to release guidance and documentation requirements for the disbursement of these funds. Patrick Kelley, associate administrator for the SBA Office of Capital Access, anticipates having such details released over the next seven to ten days. In the first availability phase, referred to as the pilot phase, the program would accept the smallest applicants first (those with $500,000 or less in 2019 gross receipts) and the priority funding applicants. After the priority/pilot phase the rest of the program funding is expected to become more widely available – perhaps over the next 30-45 days.  

Are you eligible?

Eligible entities are places of business where the public or patrons assemble for the primary purpose of being served food or drink. The Act specifically identifies the following as eligible entities:

  • Restaurants     
  • Caterers                  
  • Brewpubs                 
  • Food carts
  • Food stands     
  • Food trucks       
  • Saloons     
  • Inns
  • Taverns     
  • Bars/lounges           
  • Taprooms                   
  • Tasting rooms
  • Licensed facilities of beverage alcohol producers where the public may taste, sample, or purchase products
  • Any of the above located in an airport terminal, or that are Tribally-owned

The above entities would be excluded if:

  • They are operated by state or local government;
  • They own or operate more than 20 locations (as of March 13, 2020, together with any affiliated businesses, regardless of whether the locations do business under the same or multiple names);
  • They have a pending application for, or have received, a Shuttered Venue Operators Grant; or
  • They are a publicly traded company

What do grants cover?

The program provides support in the amount of gross receipts lost in 2020 compared to 2019. Special provisions exist for businesses not in operation for the entirety of 2019, or opening in 2020. Adjustments are also made to the maximum grant available based on PPP1 or PPP2 covered loans obtained. Grants can only be used on eligible expenses that were incurred during the covered period (February 15, 2020, through December 31, 2021). Unused funds—or funds not used for these purposes—must be returned. Eligible expenses include the following incurred as a direct result of, or during, the COVID-19 pandemic:

  • Payroll costs (as defined for PPP purposes, except for wages utilized for the Employee Retention Credit and premiums utilized under the COBRA credit)
  • Paid sick leave
  • Mortgage principal and interest, rent and utilities (excludes pre-paid principal and pre-paid rent)
  • Maintenance (includes construction to accommodate outdoor seating)
  • Supplies (includes protective equipment and cleaning materials)
  • Food and beverage
  • Operational expenses
  • Debt obligations to suppliers

Answers to your most common questions about the Restaurant Revitalization Fund can be found here.

If you have questions regarding your RRF eligibility, please contact your Brown Smith Wallace tax advisor, or Jen Vacha, Tax Partner, at jvacha@bswllc.com or 636.754.0230 or John Schwartze, Tax Principal, at jschwartze@bswllc.com or 314.824.5237.

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