Restaurant Revitalization Fund
By Matthew Diment, Senior Manager
As a part of the American Rescue Plan of 2021, passed in early March, a $28.6 billion Restaurant Revitalization Fund (RRF) was established. This fund was established to assist the hardest hit industries during the pandemic. The grant money will be primarily made available to restaurants; however, brewpubs, taprooms, breweries, wineries, and tasting rooms that derived at least 33% of their 2019 revenue from on-premise sales may also qualify. This includes bottles and merchandise sold from a tasting room. This does not include sales made to a distributor.
The grants are based on a formula designed to approximate the lost revenue from 2020. It is the difference between the gross revenue reported on your 2019 tax return and the gross revenue reported or to be reported on your 2020 tax return reduced by any PPP loan money received in both rounds one and two. If you were not in business prior to 2019, there are alternative formulas to derive the amount of the grant. Businesses may receive up to $5,000,000 per location, not to exceed $10,000,000 in total.
- The funds must be used for qualifying expenditures before March 11, 2023. Qualifying expenditures include, but are not limited to:
- Payroll costs
- Raw material costs
- Principal and interest payments on business debt (although not prepayment of debt), and construction of outdoor seating areas.
- It will be important to keep documentation of the grant expenditures by category, as the SBA requires an annual reporting of its use.
The application process may be completed in one of three ways:
- If you use one of the SBA partnered POS systems, you may submit application through their website or portal.
- Directly through the SBA’s website.
- Over the telephone.
For the first 21 days that the application portal is open, all eligible applicants may apply but only applicants that qualify as a priority business will be processed during that time. A priority business is one that is at least 51% owned by individuals who are women, veterans, and/or socially and economically disadvantaged individuals. Starting on day 22, the SBA will accept all applications and distribute funds on a first come, first served basis.
Registration for the application portal begins on Friday, April 30, at 6:00 am PST, and applications will open on Monday, May 3, at 9:00 am PST. Click here for more details about how to apply.
Additionally, the SBA website has a lot of excellent resources available including sample application forms. As a reminder, it is always prudent to consult your tax professional when entering into a large or complex financial transaction.
Learn more about Matthew Diment.