Funding Now Available to Restaurants through the Restaurant Revitalization Fund

Practice Areas

By Ashleen Sahni and Swathi Gandham

The Restaurant Revitalization Fund (RRF) has opened to new applicants beginning May 3, 2021. The RRF offers tax-free grants that do not need to be repaid to restaurants and similar businesses to help them cope with the COVID-19 pandemic. Created by the American Rescue Plan Act, the RRF provides grants of up to $10 million per business and $5 million per location.

Which Business Are Eligible for RRF?


A business is eligible for RRF funds if it meets the following conditions:

  • Is an eligible entity type, including restaurants, food stands/trucks/carts, caterers, bars, bakeries, inns, and other related businesses.
  • Is open, temporarily closed, or will open soon, with expenses incurred on or before March 11, 2021.
  • Does not own or operate more than 20 locations as of March 13, 2020.
  • Has not filed for bankruptcy or is not operating under a reorganization plan.
  • Is not a publicly traded company, nonprofit, or local government operated organization.
  • Has not received a Shuttered Venues Operators Grant (SVOG) or does not have a pending SVOG application.

Businesses can still receive an RRF grant even if they have already received a Paycheck Protection Program (PPP) loan, Economic Injury Disaster Loan (EIDL), or EIDL Advance. However, the total RRF grant may be reduced based on the amount of previous funding received by the business.

Which Expenses Qualify for the RRF Grant?


RRF grants do not need to be repaid if they are used to cover eligible business expenses before March 11, 2023, including:

  • Payroll costs, including sick leave.
  • Mortgage.
  • Rent.
  • Debt, both principal and interest.
  • Utility costs.
  • Maintenance.
  • Food and beverage costs, including raw materials.
  • Supplier costs.
  • Operating expenses.
  • Outdoor seating construction.
  • Supplies, including cleaning and personal protective equipment.

How is an RRF Grant Amount Determined?


The RRF grant amount must be equal to or less than the amount of revenue that a business has lost due to COVID-19. This amount is normally calculated by subtracting a business’s 2020 gross receipts from its 2019 gross receipts and subtracting any PPP loan amount received.

Funding requests must be more than $1,000 after deductions, up to a maximum of $5 million per location. One applicant can receive up to $10 million total for all its affiliated businesses.

What is the Restaurant revitalization fund application process?


Applications for RRF grants are currently open. The Small Business Association (SBA) will process applications from priority groups during the first 21 days of the application period, including businesses owned and controlled by women, veterans, and socially and economically disadvantaged individuals. After the initial 21-day period, SBA will review applications in the order they are received. It is imperative that your business applies for an RRF grant as soon as possible with the help of your Chugh CPAs, LLP accountant.

Business can apply for RRF grants online, through SBA restaurant partners, or over the phone. The SBA will process applications received on its website or over the phone within approximately 14 days.

Required documentation includes your 2019 tax return, 2020 tax return if filed, or point of sale reports for 2020 or certified financial statements for 2020 and latest three months of bank statements, and PPP or related loan documentation. Requirements vary by business type and for businesses that opened in 2020. Any mistakes or forgotten documentation will result in the application being rejected.

Conclusion


Qualifying businesses are encouraged to apply for a Restaurant Revitalization Fund grant as soon as possible. To ensure that your business has the best possible chance of receiving non-repayable RRF funding, contact your Chugh CPAs, LLP professional.