Understanding the Restaurant Revitalization Fund

The latest federally-sponsored, pandemic-related financial relief plan has been targeted to assist those in the food and beverage industry get back on their feet.  This relief plan is called the Restaurant Revitalization Fund (RRF) and it is sponsored by the U.S. Small Business Administration (SBA).  It was established as part of the American Rescue Plan Act and became public law in March 2021.

What is the RRF?

The RRF provides grants to eligible businesses who were impacted by COVID-19.  It was established by the American Rescue Plan Act (ARPA) this year and will provide funding to a business in an amount equal to their pandemic-related revenue loss, capped at $10 million per business and no more than $5 million per physical location.  The funds do not have to be repaid if they are used for eligible uses by March 2023.  If a business is unable to use all of their RRF award on eligible expenses by the end of the covered period then the unused funds must be returned to the federal government.

Who can apply for the RRF?

There are many types of food and beverage-related businesses that can apply for relief from the RRF.  Some of the types of businesses eligible for assistance are:

• Restaurants
• Food trucks and carts
• Bars and taverns
• Bakeries*
• Tasting rooms and taprooms*
• Breweries and microbreweries*
• Wineries*
• Inns*

*Denotes that onsite sales to the public must comprise at least 33% of their 2019 gross receipts

If a business has applied for other COVID-19 relief options through the SBA then it is likely that these awards will be factored in when calculating the amount of RRF received.

How is the award amount calculated?

The calculation will vary based on the dates of operations for a business, among other things, but the basic steps are as follows:

• The minimum amount to request is $1,000.  If a company applies for less than $1,000 then the application will be rejected.  
• Start with gross receipts reported on the 2019 federal tax return.
• Subtract the 2020 gross receipts as reported on the federal tax return.
• Subtract out the aggregate original disbursement amount of any Payroll Protection Program (PPP) Loans (from the first and second draw PPP Loans).  

What can the RRF be used for?

Funds received from the RRF can be used for a myriad of expenses that were incurred during the covered period.  The covered period began on February 15, 2020 and runs until March 11, 2023.  If the business receiving RRF permanently closes prior to March 11, 2023, then the covered period runs through the date of closing.  Some of the eligible uses of RRF funds include the following:

• Business payroll costs 
• Payments on a business mortgage obligation
• Business rent payments, including payments under a lease agreement
• Business debt service
• Business utility payments for the distribution of electricity, gas, water, telephone, internet access, or other utility service
• Business maintenance expenses
• Construction of outdoor seating
• Business supplies, including cleaning materials and protective equipment
• Business food and beverage expenses
• Covered supplier costs
• Business operating costs that are considered normal and mandatory for the business, including but not limited to training, equipment, accounting, legal, insurance, licenses, inventory)

The SBA provides an informational guide for potential applicants to follow when deciding if they are eligible to apply for the RRF.