The new Restaurant Revitalization Fund is part of the recently passed American Rescue Plan Act which provides $28.6 billion in subsidies to restaurants and food/drinking businesses affected by the pandemic.
Grants can provide up to $10 million per company with a maximum of $5 million per physical site and can be used to cover salaries, rent, utilities, and other costs.
Eligible Entities
The RRF is not just for restaurants. Entities that own businesses where people assemble for the primary goal of being served food or beverages are eligible for the RRF. The eligible entities include:
- Restaurants;
- Food stands, food trucks, and food carts;
- Caterers;
- Bars, saloons, lounges, and taverns;
- Snack and nonalcoholic beverage bars;
- Bakeries, brewpubs, tasting rooms, taprooms, breweries, microbreweries, wineries, and distilleries at which on-site sales to the public comprise at least 33% of the gross receipts;
- Inns at which on-site sales of food and beverages to the public comprise at least 33% of gross receipts; and
- Licensed facilities or premises of beverage alcohol produced where the public may taste a sample or purchase products.
Grounds for disqualification
The following are some of the circumstances wherein an entity may not be eligible for an RRF grant:
- The entity has a pending Shuttered Venue Application (SVOG) or has received a grant from SVOG.
- The entity is operated by the state or a local government.
- It is part of a publicly-traded company or majority if it is owned or controlled by a publicly-traded company.
- The entity has more than 20 locations as of March 13, 2020. It does not matter if these locations do business under the same or several names.
- The entity has no valid business tax identification number.
- It is permanently closed.
- It is a non-profit.
Application
The Small Business Administration (SBA) operates the RRF. It began its registration on April 30, 2021 and opened the applications on May 3, 2021.
The online application portal (https://restaurants.sba.gov) will remain open to all eligible businesses until all funds are used up.
You may apply for a grant through the Small Business Administration (SBA) or through SBA-recognized Point of Sale (POS) vendors.
Funding Priority
In the first 21 days of the program, the SBA will give priority to applications from small businesses owned by women, veterans, and/or socially and economically disadvantaged individuals (“Priority Group”). Following the first 21 days, the funding of all eligible applications will be based on the order in which such applications were approved by the SBA (first come, first serve).
A total of $5 billion of the RRF has been reserved for applicants with 2019 gross revenues of $500,000 or less; $4 billion for gross revenues of $500,001 to $1,500,000; and another $500 million for applicants with 2019 gross revenues of $50,000 or less.
Eligible Restaurant Revitalization Fund Grant (RRFG) Amount
The purpose of the RRF is to provide a subsidy equal to an applicant’s pandemic income loss. Applicants must apply for at least $1,000 per location and not more than $5 million per site (shall be not more than $10 million for all affiliated companies).
- For entities operating on or before January 1, 2019:
[2019 Gross receipts] – [2020 Gross receipts] – [PPP loans (1st and 2nd Draw)] = RRFG
- For entities operating during 2019:
[Average 2019 monthly gross receipts of 2019 multiplied by 12] – [2020 monthly gross receipts} – [ PPP loans (1st and 2nd Draw)] = RRFG
- For entities operating between January 1, 2020, and March 10, 2021, OR has not yet started operation:
[Eligible expenses incurred February 15, 2020 to March 11, 2021] – [Gross receipts] – [PPP loans (1st and 2nd Draw)] = RRFG
Taxability
The Restaurant Revitalization Fund Grants (RRFG) will not be included in the federal government’s gross taxable income through the IRS.
SOURCES:
SBA Restaurant Revitalization Fund
Restaurant Revitalization Fund Program – Client Update
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BSH Accounting is a Dallas Tax, Bookkeeping, and Accounting Firm that specializes in efficient advisory services for small business owners. Although we are a Dallas Accounting Firm, we have clients all over the United States.
