The restaurant industry was targeted within the American Rescue Plan (ARP) by establishing the Restaurant Revitalization Grant (RRG) program. The program has $28.6 billion for grants to eligible entities, including $5 billion earmarked for eligible entities with 2019 gross receipts of $500,000 or less. The SBA is expected to issue guidance and open the program soon.
Restaurant Revitalization Grant Eligibility
Eligible entities are defined broadly as “a place of business in which the public or patrons assemble for the primary purpose of being served food or drink.” The ARP includes a list of specific entities, including:
- Food stands and trucks
- Caterers
- Saloons, inns, or taverns
- Bars and lounges
- Brewpubs
- Tasting rooms and taprooms
- Other licensed facilities or premises of a beverage alcohol producer where the public may taste, sample, or purchase products
The following are ineligible entities:
- State or local government-operated businesses
- An entity that, as of March 13, 2020, owns or operates (together with any affiliated business) more than 20 locations, regardless of whether those locations do business under the same or multiple names
- An entity that has a pending application for or received a Shuttered Venue Operator Grant
- Publicly-traded companies
During the initial 21-day grant awards period, priority will be given to eligible entities that are small business concerns owned and controlled by women, veterans, or socially and economically disadvantaged individuals.
Restaurant Revitalization Grant Amounts
Grants distributed to eligible entities are expected to be equal to the pandemic-related revenue loss calculated as the difference between 2019 and 2020 gross receipts for each location. Maximum grant amounts are capped at $10 million for an affiliated group and $5 million per physical location and will be reduced for any first or second draw PPP loan received by the entity. An affiliated business is defined as a business in which an eligible entity has an equity or right to profit distributions of not less than 50%, or in which an eligible entity has the contractual authority to control the direction of the business, provided that the affiliation existed as of March 13, 2020.
Restaurant Revitalization Grant Uses
Eligible entities are required to spend the grant money on certain eligible expenses, such as payroll costs, maintenance expenses, supplies (including protective equipment and cleaning materials), operational expenses, utilities, etc. Entities with grant monies that go unused or used for unallowable expenses must return the funds to the U.S. Department of Treasury.
It is anticipated that the SBA will create reporting requirements to ensure grant monies were spent according to program terms and conditions.
For more information on COVID-19 relief efforts, visit our coronavirus relief resources page or browse the articles below:
Do you have questions about the new American Rescue Plan Act? Contact your Dean Dorton advisor, or contact us at:
covid19solutions@deandorton.com
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