One of the provisions of the American Rescue Plan Act President Biden signed into law on March 11, 2021, is the Restaurant Revitalization Fund. The $28.6 billion fund acts as a tax-free grant program to restaurants, bars, and associated food and beverage-related businesses. Unlike how the Paycheck Protection Program (PPP) was administered through private banks, this grant will be administered directly by the Small Business Administration (SBA). The maximum amount an eligible business and any affiliated businesses may receive has been set at $10 million and is capped at $5 million per physical business location. The calculation to determine your potential grant amount is 2019 gross receipts less 2020 gross receipts, with a further reduction in PPP loan proceeds.
Similar to the PPP program, the funds from the grant must be spent on the following categories of expenses incurred from February 15th through the end of the 2021 calendar year:
- Payroll costs
- Mortgage payments (principal and interest)
- Rent payments
- Maintenance expenses (including construction to accommodate outdoor seating and walls, floors, deck surfaces, furniture, fixtures, and equipment)
- Food and beverage expenses
- Covered supplier costs
- Paid sick leave
- Other essential expenses
However, even if an expense falls under one of the above categories, the grant may only be used for expenses “incurred as a direct result of, or during, the COVID-19 pandemic.” When filling out the grant application, a good faith certification will need to be made, under the penalty of perjury, that the current economic conditions’ uncertainty makes the grant request necessary. Also, funds not used on allowable expenses or funds spent after the covered period ends on December 31, 2021, must be returned to the SBA.
Any restaurant owners who wish to apply must be registered with the federal government using the System for Award Management (SAM). To become active on the SAM system, follow these steps:
- Create a login.gov user account.
- Sign up for a DUNS number here. There will be a 1 to 2 day processing period.
- Using your login.gov and DUNS number, register with SAM. This process can take up to 2 weeks to fully process, so it is advisable to start registering to be ready when the grant program opens.
The new relief plan gives much-needed assistance to restaurants after recently crossing the global pandemic one-year mark. Our ATKG team is carefully monitoring tax relief announcements and determining the impact on our clients. Please reach out to your ATKG advisor with any questions about how this grant can benefit your business.