A long-awaited and welcome piece of the recent stimulus package is directly pointed at the restaurant and hospitality industries. Billions of dollars in federal grant money will be available to privately owned hospitality businesses through the $1.9 trillion COVID relief bill signed into law by President Joe Biden last Thursday, March 11.
The American Rescue Plan Act of 2021 establishes a Restaurant Revitalization Fund (RRF), allocating $28.6 billion for grants to be administered by the Small Business Administration. Restaurants, food stands and carts, food trucks, caterers, saloons, inns, taverns, bars, lounges, brewpubs, tasting rooms and taprooms are eligible for RRF grants, though publicly traded companies are excluded.
Grant amounts will equal each business’s “pandemic-related revenue loss,” the difference between 2019 gross receipts and 2020 gross receipts, reduced by the amount of Paycheck Protection Program (PPP) loans received. The grant may be used for payroll costs, mortgage payments, rent payments, utilities, maintenance including construction, supplies including personal protective equipment and cleaning materials, food and beverage expenses, operational expenses and paid sick leave.
RRF grants will be capped at $10 million total and $5 million per physical location. $5 billion of the fund has been specifically allocated for businesses with gross receipts of $500,000 or less. Additionally, the funds are exclusively available for the first 21 days to women- and veteran-owned businesses or socially or economically disadvantaged small businesses. Businesses can deduct expenses paid with the grant money from their gross income for tax purposes.
The funds will be allocated to the SBA from the Treasury Department. To apply, businesses must make a “good faith certification” that the uncertainty of current economic conditions makes the grant necessary to support ongoing operations.
If you have questions about the Restaurant Revitalization Fund or would like to discuss further, please reach out to Jim Sammon at email@example.com or 216.736.7235.
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