May 24, 2021 By SmartBiz Team

It’s not a surprise that restaurants have been hit harder than any other industry during the pandemic. Although restaurant owners have access to emergency funding opportunities like the Paycheck Protection Program (PPP), There was not a dedicated funding program for this sector in the last two stimulus packages passed through Congress.

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But relief for restaurants is on the way. On March 11, the American Rescue Plan Act of 2021 created the $28.6 billion Restaurant Revitalization Fund (RRF) to provide grants for restaurants sustaining financial losses due to the COVID-19 pandemic.

On April 17, the U.S. Small Business Administration (SBA) issued the necessary federal rules, regulations, and a sample application to distribute the grant funds. Here’s important information for restaurant owners across America.

Restaurant statistics 2020/2021

The number of restaurants forced to close their doors due to the coronavirus is shocking. More than 110,000 eating and drinking establishments in the United States closed for business—temporarily or permanently—last year, with nearly 2.5 million jobs erased from pre-pandemic levels, according to the National Restaurant Association. Restaurant and foodservice industry sales fell by $240 billion in 2020 from an expected level of $899 billion.

The restaurant and foodservice industry had been projected to provide 15.6 million jobs in 2020, representing 10% of all payroll jobs in the economy. Since the pandemic started, 62% of fine dining operators and 54% of both family dining and casual dining operators said staffing levels are more than 20% below normal.

Restaurant Revitalization Fund Grant Deadlines

The Small Business Administration (SBA) began accepting applications via the application portal on Monday, May 3 at 12 p.m. EDT. The application portal will remain open to any eligible establishment until all funds are exhausted.

Prepare to apply for the RRF

In preparation, qualifying applicants should familiarize themselves with the application process in advance to ensure a smooth and efficient application. In addition to registering at the portal, follow the steps below. If you are working with Square or Toast, you do not need to register.

  • Review the sample application, program guide and cross-program eligibility chart on SBA COVID-19 relief options. SBA also added screenshots of the application portal that are available here.
  • Applications must be submitted in English or Spanish. SBA has documents in additional languages to help you understand eligibility requirements, fill out applications, and answer frequently asked questions. See the additional languages and materials here.

Eligibility for Restaurant Revitalization Fund Grants

Entities that own a place of business where the public or patrons assemble for the primary purpose of being served food or drink, including a:

  • Restaurant, Food Stand, Food Truck, Food Cart
    Snack and Nonalcoholic Beverage Bar
  • Bar, Lounge, Saloon, Tavern
  • Inns
  • Brewery, Brewpub, Microbrewery, Taproom,
  • Tasting room*
  • Bakery*
  • Winery*
  • Distillery*
  • A licensed facility or premise of a beverage alcohol producer where the public may taste, sample, or purchase products
  • Other similar place of business in which the public or patrons assemble for the primary purpose of being served food or alcohol

*Eligibility may be limited for these entities

Additionally, an entity must have been established to incur eligible expense before March 11, 2021. If an entity was not open prior to January 1, 2020, it is still eligible for RRFG. Even if an entity has not opened by the date of the application, it can apply for eligible expenses incurred in preparing to open.

Are non-profits eligible?

No. Non-profits are not eligible for RRFG.

What is the minimum and/or maximum amount for an RRFG?

The SBA has a minimum grant amount of $1,000 for eligible entities. The maximum grant amount is $5M per location and $10M total for the eligible entity.

Is an RRFG forgivable?

Recipients are not required to repay the funding as long as funds are used for eligible uses no later than March 11, 2023.

If an entity that applied for and received a 1st draw and a 2nd draw Paycheck Protection Program (PPP) loan eligible to apply for an RRFG?

Yes. However, the RRFG will be reduced by the total amount of PPP Loans.

Need assistance?

The SBA has a call center available at 1.844.279.8898 (Hours are Monday-Friday 8am-8pm ET), and local SBA District Offices are also available to help borrowers.

Restaurant success story

The Happy Cooking Hospitality Group is owned by Gabriel Stulman, a certified foodie. “I love food, cooking, and eating. When I was 17, I started traveling for food.” he says. “My parents would encourage me to sell candy, mow lawns, rake leaves or shovel driveways, so that I could make money to go buy the things that I wanted to buy.”

Stulman runs successful restaurants in New York but was hit hard by the pandemic. Read on to learn how a Paycheck Protection Program loan from a bank in the SmartBiz Loans network is helping him open up and put people back to work. He says, “I’m calm and grateful about the loans I’ve been granted, the role SmartBiz played supporting me to the finish line.”