Author: Tammy Maguire, Director of Financial Services
On March, 11, 2021, President Biden signed The American Rescue Plan Act which includes a grant program specific to one of the hardest hit industries, restaurants. The Restaurant Revitalization Fund (RRF) is a $28.6B program focused on providing grants to restaurants to provide them with relief related to pandemic-related revenue losses. Eligible entities include: restaurant; food stand; food truck; food cart; caterer; saloon; inn; tavern; bar; lounge; brewpub; tasting room; taproom; licensed facility or premise of a beverage alcohol producer where the public may taste, sample, or purchase products; or other similar place of business in which the public or patrons assemble for the primary purpose of being served food or drink. A restaurant that is publicly-traded or owned by state or local government is not eligible. Each eligible restaurant is required to have less than 20 locations, and each location is eligible for a $5M grant up to a cap of $10M per entity.
Unlike the Paycheck Protection Program (PPP), the RRF will be administered directly by the Small Business Administration (SBA). The SBA is working on technology to launch the program via an online portal directly within their site. The SBA anticipates the site will be available in early April.
Once the program is made available, it will target smaller restaurants first. During the first 21 days the grant is available, applications will be reserved for businesses with $500k or less in gross receipts in 2019 and businesses owned, operated or controlled by women, vets, and socially disadvantage. A business will also have to self-certify in good faith the grant is needed in order to remain in business.
Grant amounts will be based on the business’s reduction in gross receipts (2020 revenue less 2019 revenue). If a business was not in existence for all of 2019, the grant is determined by taking the average monthly sales for 2019 less the average monthly sales for 2020 and annualizing. Once the total grant amount is determined, any amounts received from the PPP in 2020 and 2021 will be deducted to determine the final grant amount.
During the covered period February 15, 2020 through December 31, 2021 (or a date to be determined by the SBA), the grant funds may be used for the following eligible expenses:
- Payroll
- Principal and interest payments on a mortgage – not including prepayment of principal
- Rent – not including prepayments
- Utilities
- Maintenance including construction for outdoor seating
- Supplies including payments for PPE and cleaning supplies
- Food and beverage – in line with normal business activity
- Covered supplier cost
- Operational expenses
- Paid sick leave and
- Any other expenses determined to be essential to maintaining the eligible entity
Expenses cannot have also been claimed for PPP. If money is not spent by the end of the covered period, it will then need to be repaid by the end of the covered period.
If you are a Restaurant Owner needing the assistance of an experienced Controller but don’t currently have this resource on your team as you navigate through recovery, we can help. Click here for a Case Study to learn how we worked with a Restaurant client to help them control expenses and improve efficiency.
If you need assistance or have any questions on the information in this article, please call your CironeFriedberg professional. You can reach us by phone at (203) 798-2721 (Bethel), (203) 366-5876 (Shelton), or (203) 359-1100 (Stamford), or email us at info@cironefriedberg.com.
