More Information on the Restaurant Revitalization Fund
America’s restaurants were hard-hit by the COVID-19 pandemic. The Restaurant Revitalization Fund (RRF) is designed to help. Established by the American Rescue Plan Act, the RRF has $28.6 billion available for restaurants and similar providers that lost revenue due to the COVID-19 pandemic.
If the funds are used for eligible purposes by March 11, 2023, recipients don’t have to pay them back.
Wineries, inns, catering services and other businesses that serve food and beverages may also be eligible for RFF funds. Here’s what small business owners should know about the RRF.
Please keep in mind this information is changing rapidly and is based on our current understanding of the programs. It can and likely will change. Although we will be monitoring and updating this as new information becomes available, please do not rely solely on this for your financial decisions. We encourage you to consult with your lawyers, CPAs and Financial Advisors.
Who is eligible for RRF?
Eligible applicants for RRF include:
- Food stands, food trucks and food carts
- Bars, saloons, lounges and taverns
- Snack and nonalcoholic beverage bars
- Bakeries (onsite sales to the public must comprise at least 33 percent of gross receipts)
- Brewpubs, tasting rooms, taprooms (onsite sales to the public must comprise at least 33 percent of gross receipts)
- Breweries and/or microbreweries (onsite sales to the public must comprise at least 33 percent of gross receipts)
- Wineries and distilleries (onsite sales to the public must comprise at least 33 percent of gross receipts)
- Inns (onsite sales of food and beverage to the public must comprise at least 33 percent of gross receipts)
- Licensed facilities or premises of a beverage alcohol producer where the public can taste, sample or buy products
If your bakery, brewpub, tasting room, taproom, brewery, microbrewery, inn, winery or distillery opened in 2020 or hasn’t yet opened, your original business model must have assumed that at least 33 percent of gross receipts would be from on-site sales to the public.
To be eligible, your business must meet a few other criteria.
- It can’t be permanently closed.
- It can’t be operating under Chapter 7, 11, 12 or 13 bankruptcy.
- It must have a valid tax identification number (EIN, ITIN or SSN).
- You must own or operate 20 or fewer locations as of March 13, 2020. (Franchisees with more than 20 locations are eligible if the franchise is listed on the SBA Franchise Directory.)
How much money can I qualify for?
To figure out how much to apply for, calculate the amount of lost revenues due to the pandemic. There are three different calculation formulas depending on whether you:
- were in business on or before January 1, 2019;
- opened for business partway through 2019; or
- either began operations between January 1, 2020, and March 10, 2021, or haven’t opened yet but have incurred eligible expenses as of March 11, 2021.
Calculations are simplest for applicants that were in business on or before January 1, 2019. Subtract 2020 gross receipts from 2019 gross receipts as reported on your federal tax return. (Funds from a PPP or EIDL loan, advances on EIDL, state and local grants via CARES Act or otherwise, and SBA Section 1112 payments do not count toward gross receipts for this program.) Then subtract the aggregate original disbursement amount of any PPP loan you received (excluding any PPP loan repaid on or before May 18, 2020).
The minimum award is $1,000; the maximum award is $10 million per business and no more than $5 million per location.
If you have multiple locations that all operate under the same EIN, you must file a single application for all the locations. If each location has its own EIN, you must complete a separate application for each.
What can RRF funds be used for?
Funds may be used for expenses including:
- 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; however, this does not include 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
- Business operating expenses
You can reimburse yourself for personal funds you used for eligible expenses incurred on or after February 15, 2020; however, your business financial statements should document that your business owes you money.
When will funds be disbursed?
SBA is prioritizing funding in two phases.
- Days 1-21: During the first 21 days in which applications are accepted, SBA will accept applications from all eligible applicants, but only process and fund applications of applicants who self-certify that they meet the eligibility requirements for a small business owned by women, veterans, or socially and economically disadvantaged individuals.
- Days 22 through funds exhaustion: Assuming funds are left after the initial phase, SBA will accept applications from all eligible applicants and distribute funds in the order in which they are approved by SBA.
To help ensure equitable distribution, SBA has set aside:
- $5 billion for applicants with 2019 gross receipts of not more than $500,000
- $4 billion for applicants with 2019 gross receipts from $500,001 to $1,500,000
- $500 million for applicants with 2019 gross receipts of not more than $50,000
I received other pandemic-related loans or grants. Does that mean I can’t apply for the RRF program?
If you received an Economic Injury Disaster Loan (EIDL) or a Paycheck Protection Program (PPP loan), you can still apply for RRF, but any PPP loans you received will affect your funding calculation. If you have a pending PPP application, you must withdraw it when you apply for RRF.
If you have a pending application for or received a Shuttered Venue Operators Grant (SVOG), you cannot apply for RRF. However, if your SVOG application was denied, you can apply for RRF.
Will I have to repay this money?
You won’t have to pay the money back if it’s used for eligible purposes no later than March 11, 2023. Any money not used by that time must be returned to the government.
How do I apply for RRF?
Applications open on Monday, May 3, at noon Eastern time. If you use an SBA-recognized Point of Sale Restaurant Partner (Square, Toast, Clover or NCR Aloha), applying through that partner is the fastest and easiest way to apply, because they already have your financial data.
If you don’t use one of these partners, you can apply on the application portal.
Demand for these funds will undoubtedly by high. To ensure you're ready to apply, register for an account beginning at 9 a.m. Eastern on April 30. (Registration isn’t necessary if you’re applying through a POS.) You should also review the RRF program guide, RRF FAQs and sample application form and gather your supporting documentation.
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Funded, in part, through a Cooperative Agreement with the U.S. Small Business Administration. All opinions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA.