Article

What you need to know: The $28.6 billion Restaurant Revitalization Fund

April 13, 2021 · Authored by Todd C. Bernhardt

In an effort to help restaurants and bars recover from the financial impact of COVID-19, the American Rescue Plan Act established a $28.6 billion “Restaurant Revitalization Fund” (RRF) within the U.S. Small Business Administration (SBA). Read below to learn more.

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About the grants

A tax-free federal grant equal to the amount of its pandemic-related revenue loss may be given to an eligible business and is calculated by subtracting the business’ 2020 gross receipts from its 2019 gross receipts. If the business:

Was not in operation for the entirety of 2019, the total is the difference between 12 times the average monthly gross receipts for 2019 and the average monthly gross receipts in 2020 (or a formula from SBA)
Was not in operation until 2020, it can receive a grant equal to the amount of “eligible expenses” subtracted by its gross receipts received (or a formula from SBA)
Is not yet in operation as of the application date, but it has made “eligible expenses,” the grant would be made equal to those expenses (or a formula from SBA)

Consider 1st and 2nd draw PPP loan funds

Pandemic-related loss in revenue for businesses are reduced by any amounts received from the Paycheck Protection Program (PPP) First Draw and Second Draw loans in 2020 and/or 2021.

How will grants be distributed?

Awards can be adjusted by the SBA based on demand and “relative local costs” in the markets where RRF businesses operate. Otherwise:

The SBA can award $23.6 billion in an equitable manner to businesses of different sizes based on annual gross receipts
$5 billion is available to businesses with gross receipts of $500,000 or less during 2019
Maximum: The total grant amount for an eligible business and any affiliated businesses is capped at $10 million and is limited to $5 million per physical location of the business

Prioritization

For an initial 21-day period, the SBA will prioritize awarding grants for small business concerns owned and controlled by women, veterans, or socially and economically disadvantaged small business concerns.

Covered period

Eligible expenses include those incurred from February 15, 2020 to December 31, 2021, or a date determined by the SBA. If all grant funds are not spent by the business, or the business permanently closes before the end of the covered period, the business must return unused funds to the Treasury.