On March 11, 2021, President Biden signed into law the American Rescue Plan Act (“ARPA”), which, among other things, provides funding for the Restaurant Revitalization Fund (the “RRF”) for small business restaurants, breweries, pubs, and other eligible businesses affected by the COVID-19 pandemic. The RRF allocates $28.6B for eligible businesses in need, and is intended to alleviate some of the financial hardship businesses may have felt in the last year by replacing pandemic related revenue loss up to $10M. If you have any questions or would like more information, please contact Eaton Peabody attorney, Jack Bjorn at jbjorn@eatonpeabody.com.
Restaurant Revitalization Fund Purpose:
The RRF is intended to replace pandemic related revenue loss up to $10M (and no more than $5M per physical location). The fund award is treated as a grant so long as used for eligible purposes by March 11, 2023.
Eligible Recipients:
Restaurants, food stands, food trucks, food carts, caterers, bars, saloons, lounges, taverns, bakeries, brewpubs, tasting rooms, taprooms, breweries/microbreweries, wineries and distilleries, inns, and other licensed facilities or premises of a beverage alcohol producer where the public may taste, sample, or purchase products.
Fund Application:
Registration for the SBA application portal will begin on Friday, April 30, 2021, at 9 am ET. Applications will open on Monday, May 3, 2021, at noon ET.
You can apply directly via the SBA website.
You will need to verify your tax information and submit documentation of your gross receipts and applicable eligible expenses.
Applicants that are brewpubs, tasting rooms, taprooms, breweries, wineries, distilleries, bakeries, or inns must submit evidence that onsite sales to the public comprise at least 33% of gross receipts for 2019. For businesses that opened in 2020, the applicant’s business model should have contemplated at least 33% of gross receipts in onsite sales to the public.
Application Prioritization:
For Day 1 through 21 of program availability, the SBA will prioritize applicants that meet eligibility requirements for small businesses owned by women, veterans, or socially and economically disadvantaged individuals (including those that have been subjected to racial or ethnic prejudice or culture bias, and those whose ability to compete has been impaired due to diminished capital and credit opportunities compared to others in the same business area).
For Day 22 onward of program availability, the SBA will process applications in the order which they are approved by the SBA until all funds are exhausted.
Fund Amount:
Option 1: For applicants in operation prior to or on January 1, 2019:
The business’ 2019 gross receipts minus 2020 gross receipts, minus PPP loan amounts.
Option 2: For applicants that began operations partially through 2019:
The business’ average monthly 2019 gross receipts multiplied by 12, minus 2020 gross receipts, minus PPP loan amounts.
Option 3: For applicants that began operations between January 1, 2020 and March 10, 2021, as well as applicants that have not opened but have incurred eligible expenses:
The amount spent on eligible expenses from Feb. 15, 2020 through March 11, 2021, minus 2020 gross receipts, minus 2021 gross receipts, minus PPP loan amounts.
“Gross receipts” does not include amounts from the first or second draw of the PPP, amounts received from EIDL loans, EIDL Advances, state and local grants, or SBA Section 1112 payments.
Eligible Uses:
Business payroll costs including sick leave, payments on any business mortgage obligation, business rent payments, business debt service including principal and interest, utilities, maintenance expenses, construction of outdoor seating, business supplies including PPE and cleaning materials, food and beverage expenses, covered supplier costs, and other business operating expenses.
Link to Sample Application:
Relationship to Other SBA Programs:
Applicants that have a pending application for or have received a Restaurant Revitalization Fund award are not eligible to apply for Shuttered Venue Operators Grants (“SVOGs”). However, applicants may receive an RRF award even if the entity has applied for and received a PPP award or an EIDL loan.