Restaurant Revitalization Fund (RRF)
This program provides grants to restaurants and other food/beverage businesses to make up for COVID revenue losses. This $28.6 billion fund was established as part of the American Rescue Plan Act. Below is an overview of the program, and we'll be keeping it updated the entire time the program is open.
Who Is Eligible
Below is a list of eligible businesses:
Food stands, food trucks, food carts
Bars, saloons, lounges, taverns
Snack and nonalcoholic beverage bars
Licensed facilities of a beverage alcohol producer where the public may taste, sample, or purchase products
These businesses are eligible if their onsite sales to the public make up at least 33% of gross receipts:
Brewpubs, tasting rooms, taprooms, breweries
Wineries and distilleries
Other similar places where the public assembles to be served food or drink
Other eligibility criteria:
As of March 13, 2020 operated together with all affiliated businesses no more than 20 locations, regardless of the name or type of business at each location. (Affiliated businesses
Cannot have received a Shuttered Venue Operators Grants (SVOG) or have an application pending.
Is not a publicly traded company or majority-owned or controlled by a public company.
Cannot be a state or local government owned business.
Cannot be a non-profit organization.
Must be open or planning to re-open soon, with expenses incurred by March 11, 2021.
Cannot have filed for Chapter 7 bankruptcy, and if filed for Chapter 11, 12, or 13 must have an approved reorganization plan.
Must not be included in the SBA ineligible list found here - 13 CFR 120.110
For most businesses, the grant amount is equal to the drop in revenue from 2019 to 2020 minus any PPP loans received. However, there different formulas depending on when the business was first in operation. For calculating grant amounts, "in operation" means the day the business started making sales. The business cannot use the day it formally incorporated or began incurring expenses.
Funding may be from $1,000 up to a maximum of $5 million per location (cannot exceed $10 million total for any applicant for all affiliated businesses).
Calculation 1 - For a business in operation all of 2019
Take full year 2019 gross receipts, then subtract 2020 gross receipts and subtract any PPP loans received.
Calculation 2 - For a business that began operations sometime in 2019
(Note: businesses who began operations partially through 2019 can elect to use either Calculation 2 or 3, at their discretion.)
1. Calculate average 2019 gross receipts (2019 gross receipts divided by # of months in business in 2019).
2. Calculate annualized 2019 gross receipts (average gross receipts from #1 multiplied by 12).
3. Take annualized 2019 gross receipts from #2, then subtract 2020 gross receipts and subtract any PPP loans received.
Calculation 3 - For a business that began operations between January 1, 2020 and March 10, 2021 (or did not open by March 10 but started to incur eligible expenses by March 11, 2021):
1. Start with total spent on "eligible expenses" incurred between February 15, 2020 and March 11, 2021
2. Subtract gross receipts earned between January 1, 2020 and March 11, 2021.
3. Subtract the total of any PPP loans received.
Grant money may be used for these eligible expenses, and these must be incurred during the "covered period" (see below).
1. Payroll costs, including sick leave.
2. Premiums related to group health care, life, disability, vision or dental insurance.
4. Supplies, including protective equipment and cleaning materials.
3. Food & beverage expenses, including raw materials.
4. Business operating expenses (e.g. rent, equipment, inventory, training, legal, marketing, licensing).
5. Business mortgage obligations or rent payments (excluding prepayments).
6. Business debt payments.
7. Utility payments.
8. Maintenance expenses.
9. Construction of outdoor seating.
The covered period is February 15, 2020, or the date the business was first in operation if after that date, until March 11, 2023. If the business permanently closes prior to March 11, 2023, the covered period ends when the business closes. Any funds not used for eligible expenses by March 11, 2023 will need to be returned.
1. Grant application - SBA Form 3172.
Here is a sample from the SBA for applicants to see what is included. Note - the actual form will be completed online during the application process. No physical form will be submitted to the SBA. Included information:
Business name, DBA, address, TIN.
Business ownership information.
Personal information on all owners of 20% or more of the business.
2. Gross receipts documentation.
a. 2019 Federal Tax Return (if open at any point of 2019)
b. For 2020 and 2021, the below can by provided to verify gross receipts and, when applicable, eligible expenses:
Business tax returns (IRS Form 1120 or IRS 1120-S)
IRS Forms 1040 Schedule C; IRS Forms 1040 Schedule F
For a partnership: partnership’s IRS Form 1065 (including K-1s)
Externally or internally prepared financial statements such as Income Statements or Profit and Loss Statements
Point of sale report(s), including IRS Form 1099-K
3. For inns, brewpubs, tasting rooms, wineries and others subject to the requirement of 33% of onsite sales, documentation verifying the % of onsite sales. These can be 2019 Tax and Trade Bureau (TTB) forms or state forms filed, or internally prepared reports from inventory, sales or accounting software. For businesses opened in 2020, the applicant’s original business model must have contemplated at least 33% of gross receipts in onsite sales.
4. For gross receipts and eligible expense documentation other than federal tax returns, it is advisable to provide an accountant's comfort letter commenting on internally prepared financial statements or reports.
5. Three months of bank statements.
6. Bank account information.
7. For franchises not on the SBA franchise registry, provide the Franchise Disclosure Document and all other franchise documents applicant was required to sign.
8. Verification for Tax Information
The IRS Form 4506-T will be completed and signed applicants digitally on the SBA platform during the application.
There are no lenders involved. Applications are made directly with the SBA (or approved POS vendor). This will be good if the SBA platform runs smoothly, but it also puts more pressure on applicants to get their applications correct.
Applicants cannot apply twice. If an application is denied, there is no ability to re-apply or change application information. For this reason, it is critical that applicants provide very accurate, thorough and organized information. Where possible, applicants should have an accountant or advisor review all information and assist with the process. For those who would like help, we are offering our services for a short time after the portal opens.
Applications can be made directly through the SBA application portal - https://restaurants.sba.gov - or through certain SBA-approved Point of Sale (POS) vendors. Participating POS providers currently include Square and Toast. (Clover, Aloha and Oracle are also participating in the program but only by providing pre-made reports for gross receipts - you cannot apply through those POS vendors.)
The application portal will begin accepting applications Monday, May 3, 2021, 12pm EST. Grants will be awarded in the order in which applications are received with priority for the first group as shown below.
During the first 21 days, the SBA will accept applications from all eligible applicants, but only process and fund priority group applications where the applicant self-certifies that it meets the eligibility requirements for a small business owned by women, veterans, or socially and economically disadvantaged individuals.
$5 billion is set aside for applicants with 2019 gross receipts of not more than $500,000
An additional $4 billion is set-aside for applicants with 2019 gross receipts from $500,001 to $1,500,000
An additional $500 million is set-aside for applicants with 2019 gross receipts of not more than $50,000