The Restaurant Revitalization Fund Brings Relief to the Restaurant Industry
COVID-19 has been the death knell for hundreds of thousands of small businesses and restaurants. This is doubly true for restaurants who are small businesses — specifically the unique mom-and-pop shops that have been forced to close while the large chains continue to survive.
The Restaurant Revitalization Fund (RRF) was recently established to provide economic assistance to restaurants struggling due to COVID-19.
Restaurants, bars, food trucks, bakeries, breweries, wineries, inns, and caterers can apply for grant funding. The funding will be administered through the Small Business Association (SBA), a federal agency dedicated to helping small businesses.
Once the program opens, the SBA will allocate funding to applicants based on a partial priority system. For the first 21 days of operation, the program will only provide funding to priority applicants. In order to qualify as a priority applicant, the business must be majority-owned by women, socially or economically disadvantaged persons, veterans, or some combination thereof. After the priority timeframe expires, all applicants will be considered.
Businesses can apply directly through the SBA website. To apply, businesses must electronically complete IRS Form 4506-T. Businesses will also need to provide proof of their expenses through various documents such as bank statements. Wineries, bakeries, breweries, and inns will need to provide proof that one-third of 2019 or 2020 gross revenue was generated via on-premise food and beverage sales.
Successful applicants can receive a minimum of $1,000 and a maximum of $10 million in aid. However, awarded grant funding must be used by March 11, 2023.
SBA Administrator Isabella Guzman has made it clear that the Restaurant Revitalization Fund is primarily intended to help small businesses who have been hardest hit — rather than the giants who received a majority of the bailouts from last year’s funding. Additionally, the RRF is set up to forgo the back-and-forth bureaucratic hurdles that often come with government directives and pledges to “meet each small business where they are, giving them the support they need to recover, rebuild, and thrive,” says Guzman, “the SBA aims to be as entrepreneurial as the entrepreneurs we serve.”
Certain businesses may also consider applying for other federal grants, depending on their needs.
Such grants and loans include the Paycheck Protection Program, the Shuttered Venue Operators Grant, and Economic Injury Disaster Loans.
The Paycheck Protection Program (PPP) is an SBA-backed loan that helps businesses pay their employees and cover operating costs during COVID-19. Businesses can apply for the program by finding an available lender through the SBA website. Businesses can receive loan amounts equivalent to 24 weeks of expenses, including payroll and rent. The loan does not necessarily need to be repaid, as long as 60% of the funds were spent on payroll. However, receiving PPP funds will impact the amount of funding available to a business via RRF, and PPP loans are only available through May 31, 2021.
The Shuttered Venue Operators Grant (SVOG) is available to businesses operating venues that have suffered during COVID-19. Such venues include movie theaters, live concert venues, and museums. Once an application is approved, the provided funds may be used to cover expenses such as payroll, rent, utilities, or mortgage payments. $2 billion of SVOG funding — worth a total of $16 billion — has been reserved for small businesses with a maximum of 50 employees. However, businesses that have applied for or received SVOG funds cannot apply for RRF.
Small businesses and nonprofits are also eligible for Economic Injury Disaster Loans (EIDL), which are loans of up to $500,000 that cannot be forgiven. EIDL funds can be used to cover payroll and operating expenses such as rent. Small businesses are free to apply for funding from both EIDL and RRF, but each business can only apply for each program once.
Ultimately, small businesses are eligible for several federal loans and grants. All of these different funding sources — the Restaurant Revitalization Fund, the Paycheck Protection Program, the Shuttered Venue Operators Grant, and Economic Injury Disaster Loans — have been made available to help keep small businesses afloat during the economic hardship of COVID-19.
Get in touch with us to learn more.