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Restaurant Revitalization Grant - Helping Food Businesses Get Back on Their Feet in 2021

Restaurant Revitalization Grant – Helping Food Businesses Get Back on Their Feet in 2021

Are you a restaurant owner whose business was impacted by COVID in 2020?

If yes, then you will want to know about this special tax-free grant for restaurants and food businesses that was issued by the government.

2020 and 2021 have been challenging years for restaurant businesses. Now, there is hope coming from SBA’s $28.6 billion Restaurant Revitalization Fund.

The American Rescue Plan Act launched the RRF on March 11, 2021. This grant provides funds to restaurants and other food businesses to help them sustain themselves during the pandemic.

There has already been a massive rush to apply for this grant. If you want to learn how to benefit from the Restaurant Revitalization Grant, then please continue reading.

Features of The Fund:
The total grant is equal to $23 billion out of which:
  • $5 billion is allocated to businesses with 2019 gross receipts less than $500K.
  • The remaining funds are for eligible entities of different sizes based on annual gross receipts.

The total amount allowed (in the aggregate of affiliates) is not to exceed $10 million and is limited to $5 million per physical location of the eligible entity.

The grant amount is equal to the pandemic-related revenue loss in 2020 of an eligible entity. 

Who is Eligible for the Restaurant Revitalization Grant?

Eligible entities include restaurants, food stands, food trucks, food carts, caterers, salons, inns, taverns, bars, lounges, brewpubs, tasting rooms, taprooms, and licensed facilities or premise of beverage producers (or similar places in which the public or patrons assemble for the primary purpose of being served food or drinks).

Such entities in airports also stand to gain from the RRF.

Your business is eligible for RRF only if:

  • 33% of your gross income is from selling food and beverages.
  • As of March 31, 2020, your total locations don’t exceed 20.
  • You are not a state-owned business, publicly traded company, or a business that has applied and got SVO.

The following entities will be given priority in fund allotment during the first 21 days after the launch of the program:

  • Owned and controlled by women
  • Owned and controlled by veterans
  • Socially and economically disadvantaged small businesses
How to Calculate the Restaurant Revitalization Grant:

A restaurant business must have pandemic-related revenue loss, with the 2020 gross receipts being less than gross receipts of 2019 in order to be eligible for the grant.

The grant amount for a business is the difference between the gross receipts of 2019 and the gross receipts of 2020 reduced by the total PPP funds received if any.

If the restaurant only opened in 2020 and has expenses greater than gross receipts received, the negative net profit reduced by the PPP is the eligible amount of the grant.

Another requirement in order to receive this grant is to make a good faith certification such that:

  • Uncertainty of current economic conditions makes necessary the grant request to support the ongoing operations of the eligible entity.
  • The eligible entity has not applied for or received a grant under section 324 of the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act.
How To Use the Restaurant Revitalization Fund?

The RRF is purely for running the business and not to grow it and includes:

  • Payroll costs.
  • Payments of principal or interest on any mortgage obligation
  • Rent payments, including rent under a lease agreement
  • Utilities
  • Maintenance expenses
  • Supplies, including protective equipment and cleaning materials
  • Food and beverage expenses that are within the scope of the normal business practice
  • Covered supplier costs, as defined in the Small Business Act 
  • Operational expenses
  • Paid sick leave.
  • Any expenses the administrator determines to be essential to maintain the eligible entity
Conclusion:

The restaurant revitalization grant is a tax-free grant and is a boon for struggling restaurant and food businesses.

If you have any queries regarding this grant, consult our team at FinAccurate to understand how it can help your food business.

If you would like to watch the video of this article, click on the link below:-

 

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