Attention Restaurants! More relief is in sight with $26.8 billion allotted to the Restaurant Revitalization Fund, with $5 billion reserved for small establishments with less than $500,000 in revenue for 2019. The process will open ‘within weeks’ at sba.gov. As soon as the official web page is released, I will publish it, and funds will be available on a first come, first served basis. Although, during the initial 21 days, the SBA will prioritize grants to women-, minority-, and veteran-owned businesses.
This Fund is not only for restaurants, but also includes bars and “similar places of business in which the public or patrons assemble for the primary purpose of being served food or drink.” Owner/operators, together with any affiliated businesses, that have more than 20 locations are ineligible for this grant, as well as publicly-traded companies. There does not appear to be any limit in the business’ size, but there is a limit as to the maximum grant amount of $10 million available to an eligible business and $5 million per physical location of the eligible business.
Qualification for the grant appears to be simply making a good faith certification that (a) the uncertainty of current economic conditions makes the grant necessary to support the ongoing operation and (b) the business has not applied for or received a grant under the Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act.
The amount of the grant is equal to the pandemic-related revenue loss of the eligible entity. Basically, you take your 2019 revenue, subtract your 2020 revenue and subtract the amount received for all PPP loans. If the total is a positive number, then that is the amount you will receive. Businesses that opened in 2019 will take their average month and multiply it by 12 to determine their 2019 revenue. Businesses that opened in 2020 are eligible to receive funding equal to the “eligible expenses incurred” minus their first- and second-draw PPP loans received. Restaurants that have not yet opened are also eligible, and can receive funding equal to eligible expenses incurred before the date of enactment.
Funds can be used for just about everything a restaurant would need to run the business, including payroll, rent, interest, utilities, maintenance, supplies, food and beverage costs, supplier costs, operational expenses and any other expenses that the SBA determines to be essential to maintaining the eligible entity. Funds not fully spent on approved costs by December 31, 2021 will need to be returned to the SBA.
For those law reading junkies, here is a link to the Section 5003 of the Act. As with everything else COVID-19 benefit related that has come out in the past 12 months, I am sure we will see additional clarifications published in the coming weeks. In any case this does appear to be a HUGE benefit to the bar and restaurant industry. Don’t procrastinate on this and miss out.
While I make every attempt to ensure the accuracy and reliability of the information provided in this article, the information is provided “as-is” without warranty of any kind. As with every other COVID-19 related Act, situations and rules get defined over time and things can and do change. PayMaster, Inc and Romeo Chicco do not accept any responsibility or liability for the accuracy, content, completeness, legality, or reliability of the information contained. Consult with your CPA, Attorney, and/or HR Professional.