- May 18, 2021
- Posted by: REBL
- Category: Accounting, Business Strategy, COVID-19 Q&A, flores blog
Restaurant Revitalization Fund (RRF) to Provide Grants to Businesses Hit by COVID-19
As we all know, the restaurant industry was one of the hardest hit from the COVID-19 lockdowns. The economic impact to the hospitality industry was devastating, and will likely take quite some time to recover. In an effort to help these businesses, on March 11th, the American Rescue Plan Act of 2021 created the Restaurant Revitalization Fund (RRF). This fund allocates $28.6 billion in grants for restaurants sustaining financial losses due to the COVID-19 pandemic.
The application is set to open up soon, and will be run directly by the Small Business Administration (SBA). Until then, here are a few quick items you should know to start preparing for the program.
Who is eligible?
Entities that own a place of business where the public or patrons assemble for the primary purpose of being served food or drink, including a:
- Restaurant, Food Stand, Food Truck, Food Cart;
- Snack and Nonalcoholic Beverage Bar;
- Bar, Lounge, Saloon, Tavern;
- An Inn;*
- Brewery, Brewpub, Microbrewery, Taproom, Tasting room;*
*Onsite sales to the public must be at least 33% of gross receipts.
What disqualifies an entity from RRF grant eligibility?
The following circumstances would preclude an otherwise eligible entity from receiving an RRF grant:
- As of March 13, 2020, the entity owns or operates (together with any affiliated business) more than 20 locations, regardless of whether those locations do business under the same or multiple names.
- The entity has received a Shuttered Venues Operations Grant (SVOG) or has a pending SVOG application.
- The entity is a publicly traded corporation or is majority-owned and controlled by a publicly traded corporation.
What is the minimum and/or maximum amount an entity can receive?
The SBA might create a minimum grant amount of $1,000 for eligible entities. The maximum grant amount is $5M per location and $10M total for the eligible entity.
Is an entity that applied for and received a 1st draw and a 2nd draw Paycheck Protection Program (PPP) loan eligible to apply for an RRF grant?
Yes. However, the RRF grant will be reduced by the total amount of PPP Loans.
How much can an eligible entity receive?
An entity can receive a tax-free federal grant equal to the amount of its pandemic-related revenue loss, subtracted by the total amount it received in all PPP loans.
For entities opened before 2019:
[Gross receipts of 2019] – [Gross receipts of 2020] – [Total amount received in PPP loans (1st and 2nd Draw)] = Restaurant Revitalization Fund Grant
The RRF grant program promises to be a lifeline for the restaurant industry, but there is a large checklist of items needed for the RRF grant applications. It is recommended that you download the sample application and checklist today so you can start preparing all documents necessary for the grant portal.
If you would like to learn more about the RRF grant, please contact FLORES today at (619) 588-2411. We are happy to assist you, and hope to help your business thrive.