Restaurants have been particularly hard hit during the coronavirus crisis, and we’re happy to report that help specifically for the restaurant industry is on the way.
The American Rescue Plan Act (ARPA) establishes a Restaurant Revitalization Fund which will be administered by the SBA and includes $25 billion earmarked for restaurant Revitalization Grants. $5 billion of this total amount will be earmarked for restaurants with gross revenue of $500,000 or less in 2019 revenue. The remaining $20 billion is available for the SBA to administer equitably to eligible entities of different sizes based on annual gross receipts.
Who’s Eligible?
Businesses eligible to receive Restaurant Revitalization Fund grants include restaurants, bars, tasting rooms, tap rooms, food trucks, and other businesses with the primary purpose of serving the public food and drink.
Specifically excluded entities include those with more than 20 locations, state and local government-operated businesses, and entities located in airport terminals. If you previously received aid under the Small Businesses, Nonprofits and Venues Act, you are also not eligible for grant funding.
How Can I use it?
Restaurant Revitalization Grants must be used for expenses within the covered period -- February 15, 2020 to December 31, 2021 – and for one or more of the following:
- Payroll costs (excluding employee compensation exceeding $100,000/year).
- Paid sick leave.
- Mortgage, rent, and utilities.
- Maintenance (including outdoor seating construction).
- Supplies, protective equipment, and cleaning materials.
- Food and beverage expenses within the scope of the normal business practice of the entity.
- Operational expenses.
- Covered supplier costs.
How much will I get?
Your awarded amount will be determined based on pandemic-related revenue loss -- basically taking your 2019 revenues and subtracting 2020 revenues.
If you weren’t open in 2019, pandemic-related revenue will be calculated by taking the sum obtained by multiplying the average monthly gross receipts of the eligible entity in 2019 by 12 and subtracting the sum obtained by multiplying the average monthly gross receipts of the eligible entity in 2020 by 12.
If you opened after January 1, 2020, the pandemic-related revenue loss would be the eligible expenses incurred by the entity minus gross receipts received.
The maximum grant amount is $10 million for an eligible entity and any affiliated businesses (normally a restaurant group). A maximum of $5 million will be awarded per physical location of an eligible entity.
Who gets priority?
Once grant applications are open, there will be a 21-day period to prioritize grants that are small businesses owned and controlled by women, small businesses owned and controlled by veterans, or those who are socially and economically disadvantaged. Businesses will have to self-certify that they meet the criteria.
Will I be taxed personally for these grants?
No! Grant amounts will not be included in the gross income of the person receiving the grants.
We’ll update you as soon as applications become available. Please reach out with questions in the meantime.
