On March 11, 2021, the American Rescue Plan Act (ARPA) was signed into law. Among other things, ARPA established the Restaurant Revitalization Fund (RRF), providing much needed relief to restaurants, bars and other food service businesses hard hit by the COVID-19 pandemic. Specifically, ARPA allocates $28.6 billion in funding for the RRF. The program, administered by the U.S. Small Business Administration (SBA), is available not only to restaurants and bars, but also to other businesses primarily engaged in the serving of food or drink, including wineries, breweries, tasting rooms, bakeries and tap rooms.
Applications will begin to be accepted on Monday, May 3. Applicants are encouraged to pre-register, beginning on Friday, April 30.
Here's what you need to know:
I. WHAT BUSINESSES MAY QUALIFY FOR AN RRF GRANT?
Businesses eligible to receive an RRF grant include the following:
- Restaurants;
- Bars, Saloons, Lounges, Taverns;
- Caterers;
- Food trucks, Food stands;
- Snack and nonalcoholic beverage bars;
- Other similar places of business where customers gather for the primary purpose of being served food or drink;
- Brewpubs, Tasting rooms, Tap rooms*;
- Breweries, Microbreweries*;
- Wineries, Distilleries*; and
- Inns**
* These businesses must provide documentation that onsite sales to the public comprised at least 33% of gross receipts in 2019.
** Inns must provide documentation that onsite sales of food and beverage to the public comprised at least 33% of gross receipts in 2019.
II. ARE THERE BUSINESSES THAT ARE INELIGIBLE TO RECEIVE AN RRF GRANT?
Yes. The following businesses are not eligible for an RRF grant:
- a State or local government-operated business;
- As of March 13, 2020, a business that owns or operates (together with any affiliated business) more than 20 locations, regardless of whether those locations do business under the same or different names, or are in different industries;
- Has a pending application for, or has received, a Shuttered Venue Operators Grant;
- Is a Publicly-Traded Company;
- Is permanently closed;
- Is a Nonprofit organization; or
- Is not eligible for funding of at least $1,000.
III. WHAT IS THE AMOUNT OF THE RRF GRANT?
The amount of the grant depends on several different factors, including gross receipts, when the business began operations, whether or not the business received one or more PPP loans and/or an Economic Injury Disaster loan (EIDL) and other factors.
The maximum grant amount is $5 million per location, not to exceed $10 million total for the applicant and any affiliated businesses. The minimum grant amount is $1,000; thus, applications requesting less than $1,000 will not be accepted.
IV. WHAT CAN THE GRANT FUNDS BE USED FOR?
The grant funds may be used for certain expenses incurred during the "Covered Period". The Covered Period begins on February 15, 2020 and ends on March 11, 2023. If funds are not used for eligible expenses by the end of the Covered Period, the balance must be returned to the U.S. Treasury.
Eligible business expenses include the following:
- Payroll costs;
- Business mortgage obligation;
- Rent
- Debt service
- Utility payments
- Maintenance expenses;
- Construction of outdoor seating;
- Business supplies;
- Food and beverage expenses;
- Covered supplier costs; and
- Certain operating expenses.
Beginning in December 2021, grant recipients will need to provide reports detailing use of the funds for each year through 2023. After the funds are exhausted, recipients must complete a "Use of Funds Assessment."
V. WHEN WILL THE RRF GRANT BE AVAILABLE?
The SBA will begin accepting applications on Monday, May 3. If applicants are applying directly through the SBA, they are strongly encouraged to pre-register, beginning on Friday, April 30.
In the alternative, the SBA has partnered with several major point-of-sale vendors to accept applications. These vendors are Clover, NCR Corporation, Square and Toast. Applicants using these vendors can access the grant application, and possibly certain data, and apply directly through the vendor. Pre-registration is not necessary if applying through a vendor.
During the first 21 days after the applications open, the SBA will only process those applications where the applicant is a small business owned by a woman, veteran, or socially and economically disadvantaged individuals. After this 21-day period, applications from all eligible applicants will be processed.
VI. WHAT DO I DO NOW?
Review this information and determine whether or not you believe you may be eligible for an RRF Grant. If so, decide whether you'd like to apply directly through the SBA or through one of the third-party vendors. We are here to help with this process in any way we can.
For more information on RRF Grants, SVOG Grants or related issues, contact Ron Rolleri at ron@rollerilaw.com.
