Restaurant Revitalization Fund

Co-authored by Joseph Begin

The American Rescue Plan Act of 2021 that was signed into law on March 11, 2021 included a $28.6 billion Restaurant Revitalization Fund that will provide grants of up to $10 million per entity or $5 million per location for a variety of food service businesses including restaurants, bars, food trucks, tasting rooms, caterers, food carts, pubs and taverns.

The grants will be based on a straight drop of gross receipts from 2019 to 2020, less any amounts received from first and second draw Payroll Protection Program (PPP) loans.  For example, a restaurant that saw its gross receipts drop from $2 million in 2019 to $1 million dollars in 2020 would have a tentative grant award of $1 million.  It would then reduce the $1 million dollars by its total PPP Loan funds from draws 1 and 2 (in total $600,000) to receive a Restaurant Revitalization Grant of $400,000.

Grants may be used for a wide variety of business expenses including payroll, rent, utilities, supplies, maintenance, construction to accommodate outdoor seating, food costs, supplier costs, operational expenses or anything else the SBA determines is essential in maintaining the business.

Details on the application process, eligibility guidelines, and exact day or week that applications may be submitted remains a mystery, but the SBA recently stated that it planned to start posting details about the program on its website in early April.  Consistent with other pandemic-related restrictions designed to prevent double-dipping, one would assume that expenses being used to claim forgiveness of PPP Loans may not also serve as eligible expenses for purposes of Restaurant Revitalization Grant proceeds.

Given the overall effect of the pandemic on the restaurant industry, the expectation is that competition for these grants will be fierce.  Special prioritization will be given to entities controlled by women, veterans and socially and economically disadvantaged individuals during the first 21 days of the grant process.  The US Chamber of Commerce is urging all potential grant applicants to register with the government using the System of Award Management (SAM) if they have not already done so.

As outlined by the Chamber, owners and operators should follow the following steps in order to register:

  • Create a login.gov user account that allows you to interact with the SBA and other federal agencies.
  • Sign up and receive a DUNS Number. DUNS Numbers take a couple of days to process and are required for all government contractors or grant applicants.
  • Using your login.gov email, DUNS Number, and business information, register with SAM. It can take up to 2 weeks to be fully set up on SAM so beginning this process now will enable taxpayers to be prepared when the SBA opens up the application process.

While the exact details of what you will need to provide are not yet known, documentation of your decrease in gross receipts will undoubtedly be part of the application process.

For more information or a discussion on how this may impact you, please contact Andy Smith or your BNN advisor at 800.244.7444.

Disclaimer of Liability: This publication is intended to provide general information to our clients and friends. It does not constitute accounting, tax, investment, or legal advice; nor is it intended to convey a thorough treatment of the subject matter.