No question, the pandemic has taken its toll on a lot of small restaurants over the last 12 months. For a lot of them, because of the way the Paycheck Protection Program (PPP) was structured, they didn’t get the help they needed. The American Rescue Plan includes the Restaurant Revitalization Fund, which is designed to help restaurants that might not have been able to leverage the PPP during 2020.
If you own a restaurant and were impacted by COVID-19, you should know about it. The Restaurant Revitalization Fund makes eligible a lot of small businesses that might not have qualified for PPP funds.
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What businesses are eligible?
If your business was open on Feb. 15, 2020, these funds will be available to “eligible entities” through Dec. 31, 2021. Eligible businesses include restaurants, food stands, food trucks, food carts, caterers, saloons, inns, taverns, bars, lounges, brewpubs, tasting rooms, taprooms, licensed facilities or a premise of a beverage alcohol producer where the public may taste, sample, or purchase products, or other similar businesses where the public or patrons assemble for the primary purpose of being served food or drink. This also includes the same types of establishments located in an airport terminal or that are Tribally-owned.
There are businesses that are not eligible, though. State or local government-owned businesses are not eligible. As of March 13, 2020, any business owned or operated (together or with an affiliate business) with more than 20 locations—regardless of whether those locations do business under the same name or different names are not eligible; any business that has a pending grant application or has received a grant under section 324 of the Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act, are not eligible. Additionally, publicly-traded companies are not eligible.
The Restaurant Revitalization Fund has $28.6 billion set aside in the Treasury that will remain available until expended.
Any eligible business can apply for this grant provided they can demonstrate:
- The uncertainty of current economic conditions makes the grant a necessary support to ongoing business operations
- The eligible business has not applied for, or received a grant under the Economic Aid to Hard-Hit Businesses, Nonprofits and Venues Act
Related: WJR Business Beat with Jeff Sloan: Restaurants Struggling Amid COVID-19 Crisis
How will Restaurant Revitalization Funds be distributed among eligible businesses?
The funds are intended to support many of the smaller restaurants across the country, which will impact how funds are distributed:
- $5 billion will be available to eligible businesses with gross receipts of $500,000 or less during 2019
- $20 billion will be available for grants to eligible businesses of various sizes based on annual gross receipts
- Grants will not exceed $10 million and are limited to $5 million per physical location of the eligible business
How are grant amounts determined?
Grant amounts will be determined by, and equal to, the amount of the pandemic-related revenue loss of the eligible business during 2019. If the business wasn’t in operation for the entirety of 2019, the total would be the difference between 12 times the average monthly gross receipts of 2019 and the average monthly gross receipts for 2020.
If your business wasn’t in operation until 2020, the grant amount can be equal to the amount of “eligible expenses” (see below) incurred by the business minus any gross receipts received. If not yet in operation as of the application date, but the business has incurred eligible expenses, the grant would amount to those expenses.
During the covered period, grant funds may be used for the following expenses incurred as a direct result of or during the pandemic:
- Payroll costs
- Payments of principal or interest on any mortgage obligation (not to be used for prepayment of principal on a mortgage obligation)
- Rent payments, including rent under a lease agreement (not any prepayment of rent)
- Utilities
- Maintenance expenses that could include construction to accommodate outdoor seating, walls, floors, deck surfaces, furniture, fixtures and equipment
- Supplies, including protective equipment and cleaning materials
- Food and beverage expenses that are within the scope of normal business practice before the covered period
- Operational expenses
- Paid sick leave
- Any other expenses that the SBA Administrator determines to be essential to maintaining the eligible business
If an eligible business receives a grant and fails to use all grant funds or permanently ceases operations on or before the last day of the covered period (Dec. 31, 2021), any funds not used will be returned to the Treasury.
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Expect grant awards to be prioritized
How grants are awarded will also be prioritized, meaning it could impact how long it takes for a grant application to be approved. During the initial 21 days, the SBA will prioritize awarding grants to eligible businesses that are owned and controlled by women, small businesses owned and controlled by veterans, or socially and economically disadvantaged small businesses.
Where can you apply for a Restaurant Revitalization Grant?
This grant will be available directly from the SBA. As we have more information about the application and where to apply, we will update this information here. More information regarding that process from the SBA is expected in early April.
This article originally appeared on Nav.com by Ty Kiisel
The post Restaurant Revitalization Fund to Provide $28.6 Billion in Grant Funding to Restaurants Hit Hard by COVID-19 appeared first on StartupNation.
via https://www.AiUpNow.com/ by Nav, Khareem Sudlow
