DISCLAIMER: This content is provided for informational purposes only and is not intended as legal, accounting, tax, HR, or other professional advice. You are responsible for your own compliance with laws and regulations. You should contact your attorney or other relevant advisor for advice specific to your circumstances.
Update as of 5/18/21: SBA Administrator Isabella Casillas Guzman announced that eligible eating establishments have until Monday, May 24, 8 p.m. ET, to submit applications to the Restaurant Revitalization Fund. The Restaurant Revitalization Fund (RRF) grant program has received more than 303K applications representing over $69 billion in requested funds. The RRF has a total of $28.6 billion available. We are advocating for additional funding to be passed and will keep you updated as we learn more.
On March 11, 2021, President Biden signed the latest $1.9 trillion COVID relief bill (the “American Rescue Plan Act of 2021,” or ARPA) into law. Included within this bill is a much-needed $28.6 billion Restaurant Revitalization Fund that is modeled after the RESTAURANTS Act. The Restaurant Revitalization Fund is designed to specifically support the recovery of small and medium-sized food and beverage businesses.
Funding will take the form of grants that will be awarded by the United States Small Business Administration (SBA). Businesses with one location are eligible to receive up to $5M in grants, while businesses that own or operate up to 20 locations, either individually or together with affiliates, can get up to $5M per location, with a maximum of up to $10M across all locations. An affiliate is a company in which a grant-eligible business has either an equity interest-- or right to profit distributions--of not less than 50 percent, or the contractual authority to control the direction of the business. Affiliation is determined as of any arrangements or agreements in existence as of March 13, 2021. The minimum eligible grant amount is $1,000.
DISCLAIMER: This article is for informational purposes only and is not legal or tax advice. If you have specific legal or tax questions, you should consult your attorney or tax advisor, as appropriate. Restaurant Revitalization Grants are made by the SBA. Toast has partnered with the SBA to help facilitate the RRF Grant application process for Toast customers, but Toast is not affiliated with the SBA and all eligibility and approval determinations are made by the SBA and not by Toast. Submitting an application does not guarantee approval, and because funds are limited, your application may not be processed before funds run out. The SBA may modify the terms or availability of the RRF Grant program at any time.
And, just so you know, information about the Restaurant Revitalization Fund is rapidly emerging, with new information coming out every day. The information in this article is up to date as of May 3, 2021 but is subject to change. We’ll do our best to provide you with updated information as it becomes available.
What Is the Restaurant Revitalization Fund?
On March 11, 2021, President Biden signed the latest $1.9 trillion COVID relief bill (the “American Rescue Plan Act of 2021,” or ARPA) into law. Included within this bill is a much-needed $28.6 billion Restaurant Revitalization Fund (RRF) that is modeled after the RESTAURANTS Act bill that was proposed last year. The Restaurant Revitalization Fund is designed to specifically support the recovery of small and medium-sized food and beverage businesses.
Funding will take the form of Restaurant Revitalization Fund grants that will be awarded by the United States Small Business Administration (SBA). Generally, a grant from the government is essentially free money that is intended for a specific purpose; unlike a loan, the grant amount does not need to be repaid. SBA Restaurant Revitalization Fund grants are not treated as taxable gross income by the IRS.
Who Is Eligible for a Restaurant Revitalization Fund Grant?
Any business is eligible for a Restaurant Revitalization Fund grant if it has experienced “pandemic-related revenue loss” and and meets the eligibility criteria below (see the SBA’s website for more information):
Food: restaurants, food stands, food trucks, food carts, caterers, bakeries
Drink: saloons, inns, taverns, bars, lounges, brewpubs, breweries and/or microbreweries, wineries and distilleries, snack and nonalcoholic beverage bars, tasting rooms, taprooms, or licensed facilities or premises of a beverage alcohol producer where people can sample, taste, or purchase products
Businesses in the above categories that are located in an airport terminal, operate independently (i.e. has its own Tax Identification Number) inside another business (such as a hotel or conference center), or that are Tribally-owned
For bakeries, brewpubs, tasting rooms, taprooms, breweries, microbreweries, inns, wineries and distilleries, onsite sales to the public (i.e., not wholesale sales) must comprise at least 33% of their gross receipts in 2019 for them to be eligible. If the business opened in 2020 or has not yet opened, its business model must contemplate 33% of its gross receipts to be made up of onsite sales to the public.
Businesses that aren’t eligible include the following:
State or local government-operated businesses
Businesses that own or operate (together with any affiliated businesses) more than 20 locations, whether under the same name or not
Businesses with a pending application for or that have have received a grant as part of the “Save our Stages Act”
Businesses that filed for Chapter 11, Chapter 12, or Chapter 13 bankruptcy, but no plan or organization has been approved; and businesses that filed for Chapter 7 bankruptcy and/or are permanently closed
Businesses with one location are eligible to receive up to $5M in grants, while businesses that own or operate up to 20 locations, either individually or together with affiliates, can get up to $5M per location, with a maximum of up to $10M across all locations. An affiliate is a company in which a grant-eligible business has either an equity interest — or right to profit distributions — of not less than 50 percent, or the contractual authority to control the direction of the business. Affiliation is determined as of any arrangements or agreements in existence as of March 13, 2021. The minimum eligible grant amount is $1,000.
Which Restaurant Revitalization Fund Applicants Are Given Priority?
For the first 21-day period beginning on the day that the SBA begins to accept Restaurant Revitalization Fund grant applications (the “priority period”), grants will only be processed and distributed to small businesses that are owned (51% or more) and operated by socially and economically disadvantaged individuals, as well as small businesses owned and controlled by women or veterans. Applicants must submit a self-certification of eligibility for priority with the grant application during this period. You can find official definitions of small businesses owned by women, veterans, or socially and economically disadvantaged individuals in the SBA’s program guide.
Different allotments of the $28.6 billion fund will be set aside by the SBA for businesses based on gross receipt thresholds as outlined below:
$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.
The end date for this prioritization period may be changed by the SBA at its discretion and the SBA reserves the right to reallocate the funds at its discretion. Grants will be awarded to eligible businesses on a first-come first-served basis as received by the SBA. This applies to the priority period above as well as for general applications after those periods end.
“There’s so much that needs to be done to level the playing field,” says Cheryl Straughter, owner of Soleil Restaurant and Catering.
How is Restaurant Revitalization Fund Grant Size Determined?
In determining your eligible grant size, the SBA will look at your gross receipts and, depending on when you opened, the amount of money that you spent on eligible expenses (see below for more information), to see if you experienced a pandemic related loss. It will also consider whether you received any Paycheck Protection Program (PPP) loans. Please scroll down to the table below for specifics about the calculations and which one applies to your business.
As mentioned earlier, the SBA may provide funding up to $5 million per location, not to exceed $10 million total for the applicant and any affiliated businesses, and the minimum eligible grant amount is $1,000.
What Are the Eligible Uses for a Restaurant Revitalization Fund Grant?
Grants from the Restaurant Revitalization Fund grants must be used on the following eligible expenses (greater detail can be found in the SBA’s Program Guide under “Eligible Uses of Funds”). After the funds are utilized, applicants will be asked to certify in the application portal that proceeds were used on eligible expenses. The SBA also reserves the right to request supplemental documentation needed to validate this certification.
Eligible expenses include:
Eligible business payroll costs (including sick leave)
Payments on any business mortgage obligation
Business rent payments (note: this does not include prepayment of rent)
Business debt service (both principal and interest; note: this does not include any prepayment of principal or interest)
Business utility payments
Business maintenance expenses
Construction of outdoor seating
Business supplies (including protective equipment and cleaning materials)
Business food and beverage expenses (including raw materials)
Covered supplier costs
Business operating expenses
Any other expenses deemed essential by the SBA; the application’s complete instructions (a sample application can be found here) will provide greater detail on the expenses above
Grants can be spent on eligible expenses incurred from February 15, 2020 through March 11, 2023. If the business permanently closes, this period will end on the date of permanent closure or March 11, 2023 — whichever occurs sooner.
Learn about the current status of restaurant relief, including national and regional relief options accessible to restaurant workers and businesses.
Restaurant Revitalization Fund Calculator and Formulas
The estimated grant amounts calculated with formulas below must yield a value of at least $1,000 to be eligible. In other words, if your grant calculation yields less than $1,000, your application will unfortunately not be accepted or approved by the SBA at this time. Grant amounts can potentially change later on depending on additional formulas as set by the SBA.
Below is a table that shows how to estimate the grant size your business is eligible for. The sample application shows the step-by-step calculations with information that needs to be filled out on the actual application through the SBA’s application portal that launched on Monday, May 3, 2021 at 12pm ET. Toast’s application portal also launched for Toast customers on Monday, May 3, 2021 at 12pm ET.
Awardees will not be required to return remaining funds received under the Restaurant Revitalization Program unless the funds were used for purposes other than for authorized purposes, if the funds were not used by March 11, 2023, or, if applicable, the awardee permanently closed before using all funds on authorized purposes.
When Will the Restaurant Revitalization Funds Be Available?
On April 27, 2021, the SBA announced that Registration for the Restaurant Revitalization Fund (at restaurants.sba.gov) will begin Friday, April 30, 2021 at 9am ET. The Restaurant Revitalization Fund application date began Monday, May 3, 2021 at 12pm ET, but SBA Administrator Isabella Casillas Guzman announced that eligible eating establishments have until Monday, May 24, 8 p.m. ET, to submit applications to the Restaurant Revitalization Fund.
How Do I Apply for Restaurant Relief?
On April 17, 2021, the SBA officially announced key details about the Restaurant Revitalization Fund grant application process at www.sba.gov/restaurants — this website provides an in-depth program guide, links out to its knowledge base, and also supplies a sample application so you can get a better sense of how to apply. As mentioned above, applicants have until Monday, May 24, 8 p.m. ET, to submit applications to the Restaurant Revitalization Fund.
SBA Restaurant Revitalization Grant Application Information
The SBA announced that registration for Restaurant Revitalization Fund grants will begin Friday, April 30, 2021 at 9am ET (at restaurants.sba.gov) and the application period began on Monday, May 3, 2021 at 12pm ET.
Below, you can find key official resources provided by the SBA:
Restaurant Revitalization Fund Webpage: general information and helpful links
Program Guide: detailed information about the fund and application
Sample application (SBA Form 3172): an example of what you’ll need and how to get ready to fill out the application
The SBA Restaurant Revitalization Fund application can be accessed and completed through three methods: through an SBA Restaurant Partner’s custom application portal (like Toast's), through the SBA’s digital portal, or over the phone.
The SBA’s Restaurant Partners like Toast have developed capabilities to make it easier for applicants to calculate, validate, and submit applications to the SBA. The SBA encourages applicants who use an SBA Restaurant Partner to apply through the partner's customized portal if they can — this will save time in preparing and processing the application. If you are not a Toast customer, contact your Point of Sale provider to see if they are an SBA Restaurant Partner.
Toast is excited to have partnered with the SBA to help our customers get access to RRF grants, although Toast is not affiliated with the SBA and all determinations regarding approval and grant amounts are made by the SBA and not by Toast. Toast’s application portal launched on Monday, May 3rd at 12pm ET.
Once your application is complete, the SBA estimates that it will take 14 days to review the application; however, if you are a Toast customer that applies through Toast’s application portal, and substantially all of your 2019 and 2020 gross receipts were processed exclusively on Toast, then your application will be processed more quickly than if you applied through the SBA directly.
If you wish to apply with the SBA directly, you can access the SBA Restaurant Revitalization Fund application form directly through the SBA and can be completed digitally on the SBA Grant Platform. If you don’t have access to the Internet, you can apply over the phone by calling (844) 279-8898 — remember to have all of the documentation and information ready. This is the same phone number to call if you have questions or need help; for information specific to your region, reach out to your local district office.
However you apply, if your application is approved, funds will be automatically deposited into the bank account entered in the application. Please note that if you submit your application during the 21-day priority period and you do not qualify for priority processing, your application will not be processed until the period has ended (pending funds availability).
We recommend that you carefully read through the application and its process to make sure you fill the application out correctly. The SBA estimates that it will take about 45 minutes to gather all necessary information and complete the application. It is paramount to ensure that your application is filled out correctly, that all supporting documents are provided with your application, and that your award amount is calculated properly. The SBA may deny your application if it is incomplete or lacks required documentation, so double check (or even triple check) your work!
One last note to pass along — the application is meant for the SBA to determine your eligibility — it does not guarantee approval nor an award of funds.
A break-even analysis can help you determine fixed and variable costs, set prices and plan for your business's financial future. Read on to learn more about finding the break-even point for your restaurant.
What Do I Need to Apply for a Restaurant Revitalization Fund Grant?
The application will require that you provide certain, specific business and eligibility information as well as information to calculate your grant amount (see tables in the sample application); additionally, specific types of supporting documentation must also be provided as outlined on the SBA’s website.
To apply for a grant, businesses must make a “good faith certification” that the uncertainty of current economic conditions makes it necessary for them to request a grant to support their ongoing operations, and that they have not applied for or received any grants that are part of the Save our Stages Act.
Applicants must have a valid Taxpayer Identification Number (TIN) listed below:
Employer Identification Number (EIN) - A restaurant with multiple locations under the same EIN must apply for all locations in one single application. Applicants may not apply on behalf of other entities such as affiliates or subsidiaries.
As a reminder, the SBA announced that businesses will not need a DUNS number, CAGE number, or SAM registration as part of the Restaurant Revitalization Fund grant application process.
Take your time to carefully gather the information and documentation required for the application so you can be prepared to apply; the SBA's application portal opened on Monday, May 3, 2021 at 12pm ET.
Additional Restaurant Relief Options to Consider
To make sure your restaurant gets every dollar of funding it needs during this challenging time, it will be important to apply for grants and loans as soon as possible. For example, you can take advantage of Employee Retention Tax Credits or Economic Injury Disaster Loans and also receive a grant. However, since the Restaurant Revitalization Fund is still a brand new program, it will be important to get an application into the SBA’s system first before the funds are fully drawn down. In the meantime, you can check out this article for more information on COVID-19 restaurant relief around the country.