Restaurant Revitalization Fund opens May 3 – Here’s how to apply – Forbes Advisor
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Since the start of the coronavirus pandemic, more than 110,000 (i.e. 17% of) restaurants have closed permanently or long term. A new relief program integrated into the latest stimulus plan aims to help restaurants, bars and even food trucks that have been financially shaken by Covid-19. Eligible establishments will be able to apply for assistance of up to $ 10 million per business and no more than $ 5 million per physical location.
President Joe Biden signed the $ 1.9 trillion US Rescue Plan Act (ARPA) on March 11, 2021. The latest stimulus package spends $ 28.6 billion in a new restaurant revitalization fund ( RRF). This new program provides targeted relief in the form of non-refundable, tax-free grants to large food and beverage businesses.
Here’s everything applicants need to know about the RRF.
What is the Restaurant Revitalization Fund (FRR)?
The RRF was created as part of the American Rescue Plan Act of 2021, which includes several forms of pandemic relief. The RRF will be administered by the United States Small Business Administration (SBA). It aims to help restaurants and other eligible businesses continue their operations in the face of financial difficulties.
Under this program, restaurateurs and other eligible business owners can receive up to $ 10 million per business, with no more than $ 5 million awarded per physical location. Grants will not be taxed and recipients will not be required to repay grants. However, funds must be used to cover eligible expenses no later than March 11, 2023. All funds not subsequently used must be returned.
Eligible expenses must be business-related and include items such as:
- Salary costs
- Mortgage and rent payments
- Debt service
- Utility payments
- Supplier costs
- Food and beverage costs
Costs for maintenance, commercial supplies, and construction of outdoor seating may also be included, although this list is not exhaustive.
During the first 21 days of the application period, anyone can submit an application, but the SBA will only process and fund priority group applications – those from small businesses owned and controlled by women, veterans and women. socially and economically disadvantaged people.
The online application will remain open to any qualifying institution until all funds are exhausted.
Who is eligible for an RRF grant?
To qualify, applicants must:
- Be an eligible entity, including, but not limited to restaurants, food stalls, caterers and bars.
- Be open, temporarily closed, or open soon (with expenses incurred no later than March 11, 2021).
- Not own or operate more than 20 locations as of March 13, 2020, regardless of the name or business type of those locations.
- Not having filed for bankruptcy or operated under a reorganization plan approved under a Chapter 11, Chapter 12 or Chapter 13 bankruptcy.
- Not be publicly traded, non-profit, or managed by state or local government.
- Not having received a grant for closed site operators (SVOG) or have a pending application for a SVOG (those who have refused a SVOG are still eligible).
Receipt of a Paycheck Protection Program (PPP) loan, Economic Disaster Loan (EIDL), EIDL advance, or Targeted EIDL advance does not automatically prevent an otherwise eligible candidate from receiving an RRF grant. However, the total amount of the FRR grant may be reduced depending on the type of aid previously granted to the applicant.
How much can I get under the RRF?
The FRR is intended to cover eligible expenses incurred between February 15, 2020 and March 11, 2021. The grant amount must not exceed the applicant’s “pandemic-related” loss of income, less funds received under of the PPP. In general, this equates to an applicant’s 2019 gross revenue minus their 2020 gross revenue minus PPP loan amounts.
Funding requests must be $ 1,000 or more, including required deductions, as with previous P3s, and cannot exceed $ 5 million per location. The total number of applications from a single applicant should also not exceed $ 10 million for affiliated businesses, such as a group of restaurants.
Grants will be reviewed and awarded on a first come, first served basis, with the exception of priority group funding requests, which will be reviewed first within the first 21 days of the application period.
In addition to prioritizing certain applicants, $ 5 billion of the $ 28.6 billion allocation is earmarked for applicants with gross receipts of less than $ 500,000 in 2019. In addition, $ 4 billion is reserved for applicants whose 2019 gross receipts range from $ 500,001 to $ 1.5 million; and $ 500 million is earmarked for applicants whose 2019 gross receipts do not exceed $ 50,000.
How to apply for an RRF grant
The SBA has indicated that applications will be accepted in three ways:
- Through a recognized SBA catering partner. Also known as the SBA’s point-of-sale (POS) catering partners, these partners are technology companies that provide software, hardware, and payment services to the restaurant industry. Applicants who are currently using one of the partners can apply for an RRF grant through the partner’s website or secure portal.
- Directly through the SBA. Visit restaurants.sba.gov to open an account, submit an application and complete the questionnaire and required certificates. You will also need to download the qualifying expense documentation and run a DocuSign package to finalize the application.
- By telephone. Eligible applicants can call (844) 279-8898 to apply to the RRF. This involves completing a questionnaire and attestations, as with the online application, and submitting the documentation by mail.
Applications submitted through the SBA website and over the phone will take approximately 14 days to be reviewed. It is not known if requests processed by an SBA restaurant partner will have a different processing time. If you need help completing your application, you can contact the call center hotline at (844) 279-8898 or one of the SBA district offices.
What you can do now to prepare
Registration opens April 30 at 9 a.m. EDT and applications begin May 3 at 12 p.m. EDT. Once the application period opens, the SBA anticipates a wave of applicants. Since the FRR grants funds on a first come, first served basis, we recommend that you take some preliminary steps:
- Create an account in advance. The SBA opens for registration on April 30 at 9 a.m. EDT. Be sure to sign up for an account on restaurants.sba.gov during this period so that you are ready for the application window which opens on May 3 at 12 p.m.
- See the sample request form. SBA has released a sample copy of the RRF application form. Before the application window opens, take the time to review – or even complete – the template form so you know what to expect. By performing a preliminary examination, you can save time when calculating eligible expenses for the official application and possibly increase your chances of receiving a scholarship.
- Look for additional documentation. Depending on when the applicant’s business opened, the FRR application form may require documentation of gross receipts, eligible expenses, and PPP loan amounts. Applicants must provide documentation of these numbers, as well as verification of relevant tax information. Compile all of these documents now so that you are good to go when the application window opens.
RRF vs. PPP
The Restaurant Revitalization Fund aims to provide emergency assistance to restaurants, bars and other eligible businesses that have experienced economic hardship due to Covid-19. In contrast, the PPP – or Paycheck Protection Program – was created to help businesses keep their employees on their payrolls in the wake of the pandemic.
Eligible applicants can still get an RRF grant even if they have already received a PPP loan. However, the amount of a PPP loan will be charged against the money an applicant may be granted through the FRR. Consider the example of a restaurant that began operations on February 1, 2020. If the applicant spent $ 250,000 in qualifying expenses, earned $ 200,000 in gross revenue, and received a P3 loan of $ 25,000, the applicant can receive up to $ 25,000 from the RRP.
Restaurant Revitalization Fund FAQs
How long should the funds last?
Due to the high demand for funds under the FRR, the program’s allocation of $ 28.6 billion will be insufficient to meet the needs of all eligible applicants. For this reason, the SBA recommends applying on the first day the application window opens. Congress may ultimately increase funding if there is sufficient demand, but this is not guaranteed.
When will SBA apps open?
The SBA announced that registration will begin on April 30 at 9 a.m. EDT and applications will open on Monday, May 3 at 12 p.m. EDT.
What is the deadline to apply?
The SBA will accept applications from eligible applicants until the Restaurant Revitalization Fund is exhausted.
Can self-employed workers receive subsidies?
Yes; according to RRF Program Guide published by the SBA on April 17, 2021, freelancers are eligible to receive grants as long as they meet other eligibility requirements.