The American Rescue Plan Act established the Restaurant Revitalization Fund (RRF) to provide funding to help restaurants and other eligible businesses keep their doors open. This program will provide restaurants with funding equal to their pandemic-related revenue loss up to $10 million per business and no more than $5 million per physical location. Recipients are not required to repay the funding as long as funds are used for eligible uses no later than March 11, 2023.
What to expect after you’ve applied
The application for the restaurant revitalization grant is now closed. The Small Business Association (SBA) received over 362,000 applications seeking $75 billion in funding. The SBA will review applications from priority applications groups first during the first 21 days, so applicants who’ve submitted non-priority applications will remain in “Review” status. They do not anticipate communicating with applicants in “Review” status.
Following a successful application submission, all applications will enter “IRS verification” status. This process may take up to seven days and allows the SBA to validate your submission.
If you’ve already received your grant, please visit the next steps guide from the National Restaurant Association (NRA) for more information on how to utilize your restaurant relief fund effectively and legally.
New Restaurant Revitalization Fund Expense Tracker
The NRA and the American Institute of Certified Public Accountants released a RRF Expense Tracker to help grant recipients document their use of funds in specific categories. The budget tool is essential for restaurants, bars, breweries, caterers, distilleries, bakeries, food trucks and other entities to closely monitor their RRF eligible expenses.
Click HERE for full FAQs
The SBA might create a minimum grant amount of $1,000 for eligible entities. The maximum grant amount is $5M per location and $10M total for the eligible entity.
Yes. However, the RRFG will be reduced by the total amount of PPP Loans.
Any business-related interest payments on a mortgage or other debt obligation (excluding any prepayment or principal obligation) that was incurred before February 15, 2020.
Entities that can certify that they meet the definition of a woman-owned small business, veteran-owned small business, or socially and economically disadvantaged small business will be given priority for award if their application is filed with SBA within the first 21 days the application is open for submissions. Additional access may be defined in segments according to an entity’s annual gross receipts in 2019.
Click HERE to view how the SBA defines women-owned, veteran-owned, and socially and economically disadvantaged small businesses.
It is anticipated that SBA will deposit the funds directly to the bank account identified in the application.
An entity can receive a tax-free federal grant equal to the amount of its pandemic-related revenue loss, subtracted by the total amount it received in all PPP loans.
Gross receipts mean all revenue in whatever form received or accrued from whatever source, including from the sales of products or services, interest, dividends, rents, royalties, fees, or commissions, reduced by returns and allowances.
Generally, receipts are considered “total income” (or in the case of a sole proprietorship “gross income”) plus “cost of goods sold” as these terms are defined and reported on IRS tax return forms— this includes Form 1120 for corporations; Form 1120-S for S corporations; Form 1120, Form 1065 or Form 1040 for LLCs; Form 1065 for partnerships; Form 1040, Schedule C for other sole proprietorships.
Receipts do not include net capital gains or losses; taxes collected for and remitted to a taxing authority if included in gross or total income, such as sales or other taxes collected from customers and excluding taxes levied on the concern or its employees; proceeds from transactions between a concern and its domestic or foreign affiliates; and amounts collected for another by a travel agent, real estate agent, advertising agent, conference management service provider, freight forwarder or customs broker.
Subcontractor costs, reimbursements for purchases a contractor makes at a customer’s request, investment income, and employee-based costs such as payroll taxes are not excluded from receipts
An eligible entity can use grant funds for eligible expenses incurred from February 15, 2020 until December 31, 2021. The SBA may extend this covered period an additional 14 months, until March 11, 2023, and has the authority to extend it up to 2 years after enactment of the RRFG program.
The National Restaurant Association is actively seeking clarity on this in federal regulations.
Grants will not be included as federal taxable gross income by the IRS.
Yes, the law states that “no deduction shall be denied, no tax attribute shall be reduced, and no basis increase shall be denied, by reason of the exclusion from gross income.”
If you’ve received a Restaurant Revitalization Fund grant, it can be used towards business operating expenses. This includes technology which can help you offset labor shortages, provide contactless guest experiences or add that loyalty program you’ve always had your eyes on. Get started today by speaking with one of our restaurant industry experts.