Restaurant Revitalization Fund (RRF) is offering up to $10 million to Restaurants, Caterers, Bakeries, Food stands, Bars, and other businesses that serve food. RRF was created as part of the American Rescue Plan Act with $28.6 billion in funding. See our Business Resource Center for more business financial assistance.
You get funds to help recoup what you lost due to the pandemic. The exact calculation depends on when the business originally opened. For example, if the business opened before 2019, then if you earned $500k gross income in 2019, but weren’t able to operate during most of 2020, and therefore only earned $100k gross income in 2020, you get $400k as a grant. (500-100=400). This is a grant and does not need to be repaid as long as you spend the grant correctly.
The funds are likely to run out very quickly. If you are considering applying, be ready to apply at 12:00 pm sharp Monday, May 3, 2021. If you are a “priority applicant” (more on that below), you have much better chances of getting approved before the funds run out.
We offer assistance to businesses interested in exploring their eligibility and submitting successful applications. Email, or send a us a WhatsApp message) for assistance.
Table of Contents
- Eligibility
- Grant Calculation
- Preparing for a Successful Application
- How to Apply
- Spending the Funds
- Set-asides
- Further Guidance
Eligibility
The primary purpose of the business must be serving food or drink. All standard business structures, including C-Corps, S-Corps, Partnerships and Self-employed are eligible. Nonprofits are not eligible.
- Not Permanently Closed
- Business must either be currently open, temporarily closed, or a new business that’s scheduled to open. If you permanently closed, you’re not eligible.
- Business Size
- Not a publicly-traded company
- The business, including affiliates, must have 20 or fewer locations. A caterer that caters in multiple halls (or a business with multiple food stands) is still considered one location as long as they are headquartered in one location.
- Other Grants
- The business has not applied for SVOG
- Entity Type
- 100% Eligible
- Caterers
- Restaurants
- Food stands, food trucks, food carts
- Bars, saloons, lounges, taverns
- Licensed facilities or premises of a beverage alcohol producer where the public may taste, sample, or purchase products
- Snack and nonalcoholic beverage bars
- Potentially Eligible
- Bakeries – if at least 33% of their income from 2019 is from on-site sales
- Wineries, distilleries, and breweries – if at least 33% of their income from 2019 is from on-site sales
- Inns – if at least 33% of their income is from on-site sales from 2019 of food and drinks
What does ‘on-site sales’ mean? Either consumed on-premises, ordered to-go, purchased online, and picked up or delivered, but not wholesale sales.
- 100% Eligible
Grant Calculation
- Minimum
- $1,000. If you are eligible for less than $1,000, you will not be approved.
- Maximum
- $5 million per location. If a business has multiple locations, each location is calculated separately.
- $10 million per business and across all affiliated businesses (an affiliated business is where a 20%+ owner owns or controls more than 50% of another business).
Three Ways to Calculate Grant Amount
The program offers three different methods of calculating the grant amount, primarily depending on when the business first started making sales.
Calculation #1
For businesses that started sales on or before 01/01/2019
- 2019 gross receipts
- Minus 2020 gross receipts
- Minus any PPP received
For example, if your gross receipts in 2019 was $3 million and 2020 gross receipts was $2 million, and you received $200k PPP, your grant would be $800k
Calculation #2
For businesses that started sales during 2019 (after 01/01/2019). This business can also choose to use calculation #3 instead,
- Average monthly receipts for 2019 (based on how many months left in 2019 from when the business opened)
- Multiply the average 2019 monthly income by 12
- Minus 2020 gross receipts
- Minus any PPP received
For example, if your business started sales on July 1st 2019, and grossed $1.8 million in 2019, and $2 million in 2020. The average monthly gross income was $300,000 (1.8 million divided by 6), you times $300,000 by 12, making your 2019 eligible amount 3.6 million. You minus your 2020 gross receipts of $2 million and your grant would be $1.6 million. If you received $200k PPP, your grant would be $1.4 million.
Calculation #3
For Businesses that:
– Started making sales after 01/01/2020
OR
– hadn’t started making any sales as of 03/11/2021
OR
– Started sales during 2019 (after 01/01/2019). This business can also choose to use calculation #2 instead.
- Amount spent on eligible expenses (same as eligible use of funds below) between 02/15/2020 and 03/11/2021
- Minus any gross receipts earned between 02/15/2020 and 03/11/2021
- Minus any PPP received
For example, if your business had $500,000 in expenses and $0 gross income, the grant would be $500,000
Gross Receipts
Where to find “gross receipts” on your tax return
- Self-Employed/Sole Proprietors: Schedule C line 3
- Partnerships: Form 1065 line 1c
- S-Corps: Form 1120S line 1c
- C-Corps: Form 1120 line 1c
Not included in “gross receipts“
- PPP
- EIDL
- Other government grants
- SBA Section 1112 payments
Preparing for a Successful Application
Here are five things to keep in mind when preparing your application:
- Grant Calculation Proof: Gather your required documentation to show your numbers
- Identity Verification: You will be asked some identity verification questions, so be prepared for that
- Bank Account Information: Make sure you have your online bank account log-in information to hand.
- PPP Loan Numbers and Amounts: If you received First or Second Draw PPP
- Priority Schedule: Check if you are eligible for “priority” funding. Although everyone can (and should!) apply as soon as possible, the SBA will only “priority” applications during the first 21 days.
1 – Grant Calculation Proof
Depending on business type and grant calculation method, you either need to show proof of gross receipts, eligible expenses or 33% onsite sales.
- Applicants that made sales before 03/11/2021: Proof of Gross Receipts
- Tax returns (2019 and 2020) are the most straightforward proof of gross receipts
- Alternatively, use one of the following (may delay processing of your application):
- Bank statements
- Externally or internally prepared financial statements such as Income Statements or Profit and Loss Statements
- Point of sale report(s), including IRS Form 1099-K
- If Using Calculation #3: Proof of Expenses
- Bank statements
- Externally or internally prepared financial statements such as Income Statements or Profit and Loss Statements
- Point of sale report(s), including IRS Form 1099-K
- Inns, bakeries, and alcohol businesses: Proof of 33% Onsite Sales
- Among other acceptable documentation, Internally created reports from inventory management, sales reporting, or accounting software are acceptable.
2 – Identity Verification
Be prepared to answer questions to prove your identity. If that fails, you need to provide identity documents for the SBA to verify, potentially delaying the process.
3 – Bank Account Information
The SBA will verify your business bank account using PLAID, which allows the SBA to verify and view your bank account activity. Make sure you have your bank account log-in information to hand. If you don’t connect your bank account electronically, you will need to upload the last three months of bank statements and a voided check, likely delaying the process.
4 – PPP Loan Numbers and Amounts
If the business received First Draw or Second Draw PPP, then you need to enter the loan numbers and funding amounts from both First Draw and Second Draw PPP (the PPP amounts get minused off your total grant amount.
5 – Priority Schedule
Although everyone can apply starting from Monday, May 3rd 12pm, for the first three weeks the SBA will only fund businesses at least 51% owned and daily business operations managed by:
- Women
or - Veterans
or - Socially and Economically Disadvantaged (needs to be both)
- Socially Disadvantaged: See details here.
Some requirements to be considered “socially disadvantaged”: subjected to racial or ethnic prejudice or cultural bias because of their identity as a member of a group without regard to their individual qualities. Certain groups are considered socially disadvantaged as a group. If you are not a member of one of those groups, you can STILL be considered “socially disadvantaged”.
- Economically Disadvantaged: See details here.
Some requirements to be considered “economically disadvantaged”: Net worth (excluding primary residence and more) under $750k and annual income (excluding some income) under $350k, and fair market value of all assets (including primary residence) of under $6 million. The ability to compete in the free enterprise system has been impaired due to diminished capital and credit opportunities.
- Socially Disadvantaged: See details here.
The funds are likely to be finished within the first three weeks. However, even if you are not eligible for funding during the first 21 days, try and get your application in at 12:00pm on 05/03. The applications will be processed on a first-come-first-served basis. So even if you’re not a woman, a veteran, or socially and economically disadvantaged, you should still apply right away, to get ahead in line for any remaining funds after day #21.
Note: When applying, you certify that “Current economic uncertainty makes this funding request necessary to support the ongoing or anticipated operations of the Applicant.”
How to Apply
Applications open Monday, May 3 2021 12:00 pm EST. Funds will likely run out very quickly. Congress may act to replenish the funds if/when it runs out, we don’t know yet.
Although everyone can apply from 05/03/2021, for the first three weeks (until 05/24/2021), the SBA will only process applications from “priority” applicants.
Call center support: 1-844-279-8898
- Apply directly with SBA.
- If you are a client of one of these companies, you can apply directly with them: Square, Toast, Clover, NCR Corporation
Spending the Funds
Funds need to be spent on expenses incurred between February 15, 2020 and March 11, 2023. Any unused funds will need to be returned.
Before 12/31/2021, you need to submit a report on how funds were used so far.
Use the funds for the following expenses:
- Payroll costs
including sick leave and costs related to the continuation of group health care, life, disability, vision, or dental benefits during periods of paid sick, medical, or family leave, and group health care, life, disability, vision, or dental insurance premiums - Payments on any mortgage or other debt obligation
both principal and interest payments - Rent payments
- Utility payments
E.g. electricity, gas, water, telephone, or internet access. Service had to have begun before March 11, 2021. - Maintenance expenses
including maintenance on walls, floors, deck surfaces, furniture, fixtures, and equipment - Construction of outdoor seating
- Supplies
- Food and beverage expenses
- Covered supplier costs
to a supplier of goods for the supply of goods. Either contract in place before receiving the grant funds or perishable goods even without a contract from before receiving the funds - Business operating expenses
expenses incurred through normal business operations that are necessary and mandatory for the business (e.g. rent, equipment, supplies, inventory, accounting, training, legal, marketing, insurance, licenses, fees). Business operating expenses do not include expenses that occur outside of a company’s day-to-day activities. - Not Expansion
Funds may not be used for business expansion. However, RRF funds may be used to create new and/or to expand outdoor seating.
Set-asides
- $5 billion is set aside for applicants with 2019 gross receipts of not more than $500,000
- An additional $4 billion is set-aside for applicants with 2019 gross receipts from $500,001 to $1,500,000
- An additional $500 million is set-aside for applicants with 2019 gross receipts of not more than $50,000