The Restaurant Revitalization Fund

Topics: Coronavirus (COVID-19)

Summary: Starting May 3, 2021, restaurants and other types of food- or beverage-serving establishments may apply for the Restaurant Revitalization Fund (RRF), part of the American Rescue Plan signed into law in March. This article discusses what the program offers to small business restaurant and bar owners.

More COVID Relief for Restaurant Owners is on the Way

In early March 2021, President Biden signed into law a $1.9 trillion coronavirus relief package known as the American Rescue Plan, one of the largest economic relief programs in U.S. history. The plan offered additional benefits for small businesses hit the hardest throughout the pandemic, including another $7.25 billion for the Paycheck Protection Program and $20 billion for targeted grants through the Economic Injury Disaster Loan (EIDL) program.

The Small Business Administration recently announced more aid becoming available through the American Rescue Plan with a $28.6 billion grant known as the Restaurant Revitalization Fund (RRF) specifically for restaurants, bars and other food- or drink-serving businesses. The program provides emergency assistance for eligible restaurants and other qualifying organizations affected by COVID-19. Businesses may start applying for aid beginning Friday, April 30, with applications opening at noon EST on Monday, May 3.

Who is Eligible for the Restaurant Revitalization Fund?

Businesses that have not permanently closed and those that primarily serve food or beverages to customers are eligible for the RRF program. Types of businesses include:
  • Restaurants
  • Bars, taverns, lounges and saloons, or licensed facilities of a beverage alcohol producer where the public may taste, sample and purchase products
  • Food stands, food trucks or carts
  • Snack and nonalcoholic beverage bars
  • Bakeries*
  • Brewpubs, taprooms or tasting rooms*
  • Breweries or microbreweries*
  • Wineries and distilleries*
  • Inns*
* These businesses must provide documentation with their application that their onsite sales to the public comprised at least 33% of gross receipts in 2019.

Businesses can have up to 20 locations, and franchisees for major chains may also apply. However, public companies and chain restaurants with more than 20 locations are not eligible. Likewise, live music venues that applied for funding from the SBA’s program targeting those types of establishments may not apply for the RRF.

How Will the Restaurant Revitalization Fund Help Business Owners?

Restaurants and bars experienced a 25% decrease in sales in 2020 compared to 2019. Additionally, around one in six restaurants throughout the United States closed permanently due to the pandemic. Although many restaurant owners remain hopeful that better times are on the horizon as vaccinations continue to roll out across the country, more funds are needed until demand improves.

According to the SBA, the RRF will provide funding equal to their pandemic-related revenue loss up to $10 million per business and no more than $5 million per physical location. These funds will not need to be repaid as long as they are used for eligible expenses no later than March 11, 2023.

What Can Funds be Used For?

The SBA designates the funds can be utilized for the following expenses:
  • Payroll costs, including health care benefits, sick leave and paid family leave
  • Business mortgage or rent payments
  • Business debts – both principal and interest
  • Utility payments – electricity, gas, water, phone or internet service, etc.
  • Maintenance expenses for walls, furniture, floors, fixtures or equipment
  • Construction of outdoor seating
  • Business food and beverage expenses
  • Covered supplier costs
  • Operating expenses – rent, equipment, supplies, inventory, accounting, training, legal, marketing, insurance, licenses and other fees
Again, recipients of Restaurant Revitalization Funds must use the funds by March 11, 2023, on eligible expenses incurred starting February 15, 2020, and ending March 11, 2023. The SBA will reserve $5 billion in funding for smaller, independent restaurants that earned $500,000 or less annually pre-COVID. Additionally, applications from women-, veteran-, and minority-owned establishments will be prioritized during the first 21 days of grants.

Businesses may apply for the RRF through a recognized SBA Restaurant Partner, through the SBA directly, or by calling 844-279-8898.

Insurance for Restaurants from AmTrust Financial

Restaurants face unique risk exposures, and as a preferred business class, AmTrust Financial offers restaurant insurance coverage your business can depend on. As one of the nation’s largest writers of all types of commercial insurance for small businesses and a trusted partner since 1998, we understand and support restaurant owners as they begin to adapt to a post-pandemic workplace. Find out more about our small business insurance solutions by contacting us today.

This material is for informational purposes only and is not legal or business advice. Neither AmTrust Financial Services, Inc. nor any of its subsidiaries or affiliates represents or warrants that the information contained herein is appropriate or suitable for any specific business or legal purpose. Readers seeking resolution of specific questions should consult their business and/or legal advisors. Coverages may vary by location. Contact your local RSM for more information.

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