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How the Restaurant Revitalization Fund works

The Restaurant Revitalization Fund is now closed — but there are alternatives.

The Restaurant Revitalization Fund (RRF) was a grant program that offered emergency assistance program for food service businesses. Businesses that received the grant use the grant to cover COVID-19 related losses for almost two years.

But the RRF ran out of funding quickly and is no longer accepting new applications. While there’s a chance it will reopen, restaurants should consider alternative sources of financing in the meantime.

Restaurant Revitalization Fund alternatives

The RRF is no longer accepting applications — and neither are some the Shuttered Venue Operators Grant program or the Paycheck Protection Program. But there are still some financing options that restaurants might want to consider.

  • Many state and local governments are offering coronavirus grants to small businesses — sometimes with programs specifically for the food service industry.
  • Government-backed SBA loans can be a great option to cover working capital or operating expenses. The SBA increased its guarantee to 90% and waived guarantee fees on most SBA 7(a), 504 and microloans. It’s also deferring payments until March 31, 2022.
  • Small business loans from lenders that meet the needs of restaurants can also be a good option if you need funds to grow — and have consistent revenue.

If you’re still struggling to find financing for your business, reach out to a local business development center or another SBA resource partner. These often provide free advice to business owners and can help you decide which option is best for your restaurant.

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What was the Restaurant Revitalization Fund?

The Restaurant Revitalization Fund was a $25 billion grant program for restaurants and other food service businesses that have been affected by coronavirus outbreak-related shutdowns.

Restaurants could apply for a total of $10 million — or $5 million per physical location — based on their revenue losses during the pandemic. Since it’s a grant, you don’t have to apply for forgiveness, unlike previous coronavirus assistance programs. However, you’re technically required to repay any funds you don’t use for eligible business purposes by March 11, 2023.

Who qualifies

You didn’t need to have a sit-down establishment to get an RRF grant. The following types of businesses could qualify for this program:

  • Restaurants
  • Food stands, trucks and carts
  • Caterers
  • Bars, saloons, lounges and taverns
  • Snack and nonalcoholic beverage bars

Any other business where people primarily assemble for food or drink could also qualify, like a vineyard or distillery. This also includes businesses that are located in airports or tribally-owned land — usually outside of the federal government’s reach.

Potentially eligible businesses

These types of businesses may have also qualified for a grant — but only if on-site sales made up at least a third of pre-pandemic gross receipts.

  • Inns
  • Bakeries
  • Wineries and distilleries
  • Brewpubs, tasting rooms and tap rooms
  • Breweries and microbreweries

Businesses that received a loan through the Paycheck Protection Program (PPP) or the Economic Injury Disaster Loan (EIDL) program could still qualify for an RRF grant. But a PPP loan reduced how much you were eligible to receive.

Ineligible restaurants

Even if your business falls into one of the eligible categories, the following types of businesses couldn’t qualify for the Restaurant Revitalization Fund:

  • State or local government-operated businesses
  • Businesses owned or operated with more than 20 locations as of March 13, 2020
  • Businesses that received a shuttered venue grant
  • Public companies

How to apply

While applications were opened, you could apply for the Restaurant Revitalization Fund through an SBA-recognized point of sale (POS) partner, by calling 844-279-8898 or online through the SBA’s online portal. These were the typical steps for applying on the SBA’s website:
  1. Gather the documents required to complete the application and scan any documents that aren’t already on your computer as uploadable documents.
  2. Register with the Restaurant Revitalization Award Portal on the SBA’s website.
  3. Log in to your account and complete the questionnaire and attestations to make sure your business is eligible and calculate your grant amount.
  4. Upload all required documents to your application.
  5. Check your email for a DocuSign package and sign it. The SBA won’t review your application until this has been submitted.

The SBA aimed to take 14 days to review your application. You could check the status of your application at any time by logging into your account. Once it’s reached a decision, the SBA sent you an email — and if approved the SBA deposited the funds into the bank account you linked on the application.

Unlike with the Shuttered Venue Operators Grant, you did not need to be registered with the government’s System for Award Management, or SAM.gov, to apply for the Restaurant Revitalization Fund. You also didn’t need to provide a Dun & Bradstreet number (DUNS) or Commercial and Government Entity (CAGE) code when you complete the application.

Should I apply through the SBA or a POS partner?

The SBA recommended that you apply through a POS partner if you use one — they have more capability to process the application.

You could check the SBA’s website to see if the the companies you use for point of sale software, hardware and payment services are partners. If not, applications were available through through the SBA’s portal — or over the phone if you don’t have internet access.

Required documents

All businesses were required to provide the following documents when applying for the Restaurant Revitalization Fund:

  • Business tax returns — either IRS form 1120 or IRS form 1120-S
  • IRS Form 1040 Schedule C or IRS Form 1040 Schedule F
  • IRS Form 1065, including K-1s, for registered partnerships
  • Bank statements
  • Financial statements, such as income statements or profit and loss statements
  • Point of sales reports — including IRS form 1099-K

Additional requirements for businesses with sales requirements

If your business receives at least 33% of receipts from on-site sales, you were required to submit documented evidence of those receipts along with your application. This can include the Tax and Trade Bureau (TTB) form 5130.9 if your business was established in 2019.

Businesses that opened in 2020 also were required to show that their business model expected at least 33% of sales to be from on-site sales to the public.

Calculating your grant amount

While grants maxed out at $10 million, how much you receive depends on the revenue your business lost due to the coronavirus outbreak and if it received a PPP loan.

Businesses that were established before January 1, 2019, can calculate their grant amount by subtracting your 2020 gross receipts from your 2019 gross receipts.

Businesses that were established during 2019 can receive a grant equal to the difference between:

  • Average monthly 2019 gross receipts, multiplied by 12
  • 2020 gross receipts, multiplied by 12, minus any PPP loan amounts

Businesses that were established on or after January 1, 2020, can receive a grant equal to the amount they spent on eligible expenses between February 15, 2020 and March 11, 2021, less the following amounts:

  • 2020 gross receipts
  • 2021 gross receipts through March 11
  • PPP loan amounts

What’s an eligible payroll cost?

The SBA uses the same definition of payroll costs as it does for the PPP when it comes to determining your grant amount — with a few exceptions. You can’t count any wages you wrote off to get the Employee Retention Tax Credit toward your Restaurant Revitalization Fund grant. Same applies to COBRA-related healthcare premiums that you deducted from your taxes.

How you can use the funds

You can use the funds to cover any of the following types of expenses that your business incurred between February 15, 2020, and March 11, 2023.

  • Payroll expenses — as defined by the PPP
  • Mortgage payments, including principal and interest
  • Rent
  • Business debt payments, including principal and interest
  • Utilities in service before March 11, 2021
  • Construction of an outdoor seating area
  • Maintenance of walls, floors, fixtures, furniture, deck surfaces and equipment
  • Supplies — including personal protective equipment and cleaning supplies
  • Food and beverage expenses you would have incurred under normal circumstances
  • Paid sick leave
  • Operating expenses
  • Supplier costs

Reporting use of funds

All recipients are required to report how much of the funds they’ve used on eligible expenses by December 31, 2021 — though you’re not required to use the full amount by that date. If you’ve used the full grant on eligible expenses by that date, you’re required to certify that you used the award on eligible expenses.

All other recipients are required to report their spending annually until they’ve either fully spent the funds or March 11, 2023 — whichever is sooner. While you aren’t required to submit proof that you used the grant appropriately, the SBA can ask to see documentation.

Bottom line

This lifeline to restaurant owners may not be available. But it’s not the only option for the food service industry. Read our guide to COVID-19 grants or visit our guide to business loans to learn about more options

Image: Getty

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