The Restaurant Revitalization Fund (RRF), a $28.6 billion program established by the American Rescue Plan Act in March, was created to provide relief for restaurants and other food service businesses that were affected by the COVID-19 pandemic. Registration for the SBA application portal will begin on Friday, April 30, 2021, at 9 am EST. Applications will open on Monday, May 3, 2021, at noon EST.
The following may be eligible for the RRF:
- Food stands, food trucks, and food carts;
- Bars, saloons, lounges, and taverns;
- Snack and nonalcoholic beverage bars;
- Bakeries, brewpubs, tasting rooms, taprooms, breweries, microbreweries, wineries, and distilleries at which on-site sales to the public comprise at least 33% of the gross receipts;
- Inns at which on-site sales of food and beverages to the public comprise at least 33% of gross receipts; and
- Licensed facilities or premises of a beverage alcohol producer where the public may taste, sample, or purchase products.
Applications and Required Documents
Applicants should be prepared to:
- Complete and sign IRS Form 4506-T, Request for Transcript of Tax Return.
- Submit one of the following documents:
- Business tax returns (IRS Form 1120, U.S. Corporation Income Tax Return, or IRS Form 1120-S, U.S. Income Tax Return for an S Corporation);
- IRS Forms 1040, U.S. Individual Income Tax Return, Schedule C, Profit or Loss From Business; IRS Forms 1040, Schedule F, Profit or Loss From Farming;
- For a partnership, the partnership’s IRS Form 1065, U.S. Return of Partnership Income (including Forms K-1, Partner’s Share of Income, Deductions, Credits, etc.);
- Bank statements;
- Externally or internally prepared financial statements such as income statements or profit-and-loss statements; and
- Point-of-sale reports, including IRS Form 1099-K, Payment Card and Third Party Network Transactions.
Eligible brewpubs, tasting rooms, taprooms, breweries, wineries, distilleries, and bakeries will also need to be prepared to:
- Submit documents showing evidence that on-site sales to the public comprised at least 33% of gross receipts for 2019. For example, Tax and Trade Bureau Forms 5130.9 or TTB.
Eligible inns will also need to be prepared to:
- Provide documents showing that on-site sales of food and beverage to the public comprised at least 33% of gross receipts for 2019.
For businesses that opened in 2020, the applicant’s original business model should have contemplated at least 33% of gross receipts in on-site sales to the public.
Funding details and calculations
The program includes $5 billion set aside for applicants with 2019 gross receipts of $500,000 or less; an additional $4 billion set aside for applicants with 2019 gross receipts from $500,000 to $1.5 million; and an additional $500 million set aside for applicants with 2019 gross receipts of $50,000 or less.
The RRF will grant up to $5 million per physical location and is capped at $10 million per entity and affiliates. The minimum award is $1,000. Calculations of funding amounts are as follows per the “sample” application currently available by the SBA:
- For applicants that were in operation prior to or on January 1, 2019: 2019 gross receipts minus 2020 gross receipts minus Paycheck Protection Program (PPP) loan amounts.
- For applicants that began operations partially through 2019: Annualized gross receipts for 2019 minus 2020 gross receipts minus PPP loan amounts.
- For applicants that began operations on or between January 1, 2020 and March 10, 2021; and for applicants that have not yet opened but have incurred eligible expenses: Amount spent on eligible expenses between February 15, 2020, and March 11, 2021, minus 2020 gross receipts minus PPP loan amounts.
Entities that began operations partially through 2019 may elect to use either Calculation 2 or Calculation 3.
Use of Funds
- Business payroll costs, including sick leave;
- Payments on any business mortgage obligation;
- Business rent payments, not including prepayment of rent;
- Business debt service, both principal and interest, not including any prepayment of principal or interest;
- Business utility payments;
- Business maintenance expenses;
- Construction of outdoor seating;
- Business supplies, including protective equipment and cleaning materials;
- Business food and beverage expenses, including raw materials;
- Covered supplier costs; and
- Business operating expenses.
Please reach out to an HHM professional for additional details and application assistance.