President Biden has signed the $1.9 trillion American Rescue Plan into law that includes the Restaurant Revitalization Fund, which now will provide $28.6 billion in debt-free relief for small and mid-sized restaurants and is based on the original $109 billion RESTAURANTS Act passed by the House last year.
With the rescue plan comes much needed relief and stimulus in the foodservice industry during what has been a difficult and challenging time. The American Rescue Plan will ensure independent restaurants, bars, caterers, taprooms, food trucks and others get the much needed help they deserve.
Here are some common questions restaurant operators might have regarding the upcoming grants program:
Who is eligible?
Eligible businesses include foodservice and drinking establishments that are not part of an affiliated restaurant group with more than 20 locations and are not publicly traded. Eligible entities include a restaurant, food stand, food truck, food cart, caterer, saloon, inn, tavern, bar, lounge, brewpub, tasting room, taproom, licensed facility or premise of a beverage alcohol producer where the public may taste, sample, or purchase products, or other similar place of business in which the public or patrons assemble for the primary purpose of being served food or drink.
Where can operators apply for the grant?
Once the SBA opens applications, restaurants, and bars with under 20 locations that can demonstrate revenue loss over the past year will be able to apply on the SBA website.
Are there limitations to how the funds can be spent?
They can only be used on eligible expenses (below) that incurred starting on February 15, 2020 and ending at the end of 2021. Unused funds– or funds not used for these purposes– will be returned to the government. These expenses include:
- Payroll (excluding employee compensation exceeding $100,000/year), employee benefits, and paid sick leave
- Mortgage, rent, and utilities
- Outdoor seating construction
- Supplies, protective equipment, and cleaning materials
- Food and beverage
- Operational expenses
- Debt obligations to suppliers
How is the grant amount calculated?
Eligible restaurants can expect grants that match their pandemic-related revenue loss, calculated by taking their revenue in 2019 and subtracting 2020 revenue and any PPP loan money received. According to Independent Restaurant Coalition cofounder Erika Polmer “Any funding used inappropriately, or leftover funds will go back to the government”.
For up-to-date guidance and other resources, restaurant operators can refer to the Independent Restaurant Coalition’s website at saverestaurants.com and the National Restaurant Association’s website at restaurantsact.com/rrf.