More financial help for food and beverage businesses has arrived! This new program provides emergency assistance for eligible restaurants, bars and other qualifying businesses impacted by COVID-19.
The American Rescue Plan Act established the Restaurant Revitalization Fund (RRF) to provide funding to help restaurants and other eligible businesses keep their doors open. This program will provide restaurants with funding equal to their pandemic-related revenue loss 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 funds are used for eligible uses no later than March 11, 2023.
Who Can Apply
Eligible entities that have experienced pandemic-related revenue loss include:
- Restaurants
- Food stands, food trucks, food carts
- Caterers
- Bars, saloons, lounges, taverns
- Snack and nonalcoholic beverage bars
- Bakeries (onsite sales to the public comprise at least 33% of gross receipts)
- Brewpubs, tasting rooms, taprooms (onsite sales to the public comprise at least 33% of gross receipts)
- Breweries and/or microbreweries (onsite sales to the public comprise at least 33% of gross receipts)
- Wineries and distilleries (onsite sales to the public comprise at least 33% of gross receipts)
- Inns (onsite sales of food and beverage to the public comprise at least 33% of gross receipts)
- Licensed facilities or premises of a beverage alcohol producer where the public may taste, sample, or purchase products
How to Apply
Entities can apply through SBA-recognized Point of Sale (POS) vendors or directly via SBA in a forthcoming online application portal. Participating POS providers include Square, Toast, Clover, NCR Corporation (Aloha) and Oracle. Those working with Square or Toast do not need to register beforehand on the application portal.
Registration with SAM.gov is not required. DUNS or CAGE identifiers are also not required.
Those wishing to prepare their own application may view the sample application form. Applicants will be able to complete this form online as well.
Additional Documentation Required:
- Verification for Tax Information: IRS Form 4506-T, completed and signed by Applicant. Completion of this form digitally on the SBA platform will satisfy this requirement. Gross Receipts Documentation: Any of the following documents demonstrating gross receipts and, if applicable, eligible expenses
- Business tax returns (IRS Form 1120 or IRS 1120-S)
- IRS Forms 1040 Schedule C; IRS Forms 1040 Schedule F
- For a partnership: partnership’s IRS Form 1065 (including K-1s)
- Bank statements
- Externally or internally prepared financial statements such as Income Statements or Profit and Loss Statements
- Point of sale report(s), including IRS Form 1099-K
- For applicants that are a brewpub, tasting room, taproom, brewery, winery, distillery, or bakery:
- Applicants will need to submit documents showing that onsite sales to the public make up at least 33% of gross receipts for 2019, which may include Tax and Trade Bureau (TTB) Forms 5130.9 or TTB. For businesses that opened in 2020, the applicant’s original business model should have contemplated at least 33% of gross receipts in onsite sales to the public. Same conditions apply for applicants that are an inn.
When to Apply
Applications are now open and priority periods apply where the applicant has self-certified that it meets the eligibility requirements for a small business owned by women, veterans, or socially and economically disadvantaged individuals.
Funding Amount & Payment Calculations
Calculation 1: for applicants in operation prior to or on January 1, 2019:
2019 gross receipts minus 2020 gross receipts minus PPP loan amounts
Example – If gross receipts in 2019 were $100,000 and $50,000 in 2020 and the applicant got a PPP loan for $10,000, the formula to estimate revitalization funding payout would go as follows: $100,000 – $50,000 – $10,000 = $40,000 in revitalization funds for the business.
Calculation 2: for applicants that began operations partially through 2019:
(Average 2019 monthly gross receipts x 12) minus 2020 gross receipts minus PPP loan amounts
Example: If the applicant’s average monthly gross receipts was $10,000 and $50,000 annual gross in 2020 and the applicant got a PPP loan for $10,000, the formula to estimate the revitalization funding payout would go as follows: ($10,000 x 12) – $50,000 – $10,000 = $60,000 in revitalization funds for the business.
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
Those entities that began operations partially through 2019 may elect (at their own discretion) to use either calculation 2 or calculation 3.
Maximum and Minimum Amounts
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.
Gross Receipts
For the purposes of this program, gross receipts do not include:
- Amounts received from Paycheck Protection Program (PPP) loans (First Draw or Second Draw)
- Amounts received from Economic Injury Disaster Loans (EIDL)
- Advances on EIDL (EIDL Advance and Targeted EIDL Advance)
- State and local grants (via CARES Act or otherwise)
- SBA Section 1112 payments
- Allowable use of funds
Funds May Be Used for Specific Expenses that Include:
- Business payroll costs (including sick leave)
- Payments on any business mortgage obligation
- Business rent payments (note: this does not include prepayment of rent)
- Business debt service (both principal and interest; note: this does not include any prepayment of principal or interest)
- Business utility payments
- Business maintenance expenses
- Construction of outdoor seating
- Business supplies (including protective equipment and cleaning materials)
- Business food and beverage expenses (including raw materials)
- Covered supplier costs
- Business operating expenses
The SBA has provided this information in other languages, and applications must be submitted in English or Spanish. The SBA also provides documents in additional languages to help applicants understand eligibility requirements, fill out applications, and answer frequently asked questions.
EDGAR RAFAEL OLIVO is a bilingual business educator, economic advisor and contributor for several media outlets. He’s a nonprofit executive who is passionate about education. He is certified in finance and data analytics and holds a business degree from Arizona State University.
Para la versión en español de este artículo, haga clic aquí.
