As part of the American Rescue Plan Act, passed in March 2021, $28.6 billion are earmarked for the Restaurant Revitalization Fund (the Fund), which will provide tax-free grants to food service businesses. With an estimated $250 billion reduction in revenues since the onset of the COVID-19, the foodservice industry is one of the hardest hit during the pandemic, and the Fund provides long-awaited and necessary relief. Foodservice manufacturers and distributors, who were forced to transition from sales to restaurants to CPG retail and direct-to-consumer sales throughout the course of the pandemic, will be relieved to recover lost revenues.
Although the suppliers of foodservice companies are not eligible for relief by the Restaurant Revitalization Fund, they are first in line to indirectly benefit from the Fund’s trickle-down effect. The Fund will not only revitalize restaurants but will also indirectly boost business involved in the foodservice supply chain, which has suffered drastically in the last 14 months.
WHO IS ELIGIBLE?
Those eligible for the Restaurant Revitalization grant funding (the Grant) include businesses that are not permanently closed (temporary closure does not hinder eligibility) where patrons assemble for the primary purpose of being served food or drink, including restaurants, bars, breweries, wineries, food trucks, caterers, bakeries, etc., that own or operate 20 or fewer locations as of Mach 13, 2020.
Entities that either received or applied for assistance under the Paycheck Protection Program (PPP) remain eligible for the Grant; however, PPP proceeds reduce the amount available under the Grant.
Entities who received a Shuttered Venues Operators Grant are not eligible and neither are nonprofit organizations and publicly traded companies. Click here for a full list of eligibility requirements.
QUALIFYING EXPENSES
Funds must be spent on:
- Payroll
- Principal or interest on mortgage obligations
- Rent
- Utilities
- Maintenance, including construction to accommodate outdoor seating
- Supplies, such as protective equipment and cleaning materials
- Normal food and beverage inventory
- Certain covered supplier costs
- Operational expenses
- Paid sick leave
- Any other expenses that the SBA determines to be essential to maintaining operations
THE DETAILS
As with the Paycheck Protection Program (PPP), these grants will be administrated by the US Small Business Administration (SBA). Several highlights of program are as follows:
- The Grant is generally based on the gross receipts reduction in 2020 relative to 2019, less any PPP proceeds
- Eligible businesses closed for operations in 2020 may receive a grant based on the amount of eligible expenses between Feb. 15, 2020, and March 11, 2021 minus any 2020 gross receipts and PPP loan amounts
- The grant is capped at $10 million per business, with no more than $5 million per physical location
- Funding requests must be greater than $1,000
- Recipients are not required to repay the funds as long as proceeds are used for eligible expenses incurred beginning Feb. 15, 2020 through March 11, 2023
- Any unused funds during this period must be returned to the SBA
APPLY NOW
For the first 21 days that the program is open, the SBA will prioritize funding applications from businesses 51-percent-owned and controlled by women, veterans and socially and economically disadvantaged individuals. However, all eligible applicants should submit applications as soon as the online application portal opens. Following the 21 days, all eligible applications will be funded on a first-come, first-served basis.
The eligible applicants may register online and open up accounts to apply for revitalization grants. The applications could be submitted starting Monday, May 3, 2021, at noon EDT. The online application will remain open to any eligible establishment until all funds are exhausted.
Click here to see our alert sent out on 4/29/2021.
Should you need assistance in understanding the program, eligibility criteria and eligible expenses, do not hesitate to reach out to your GHJ team.
