The newly passed Restaurant Revitalization Fund (RRF) is here to offer restaurants, bars, caterers, food trucks and others some extra financial help as we transition into a period of recovery. Part of the American Rescue Jobs Act, it includes $28.6 billion of funding for the Small Business Administration (SBA) to fuel grants designed to aid a multitude of culinary businesses in what we hope are the final stages of the COVID-19 pandemic.
Registrations for RRF begin at 9 a.m. on April 30, while applications will open at noon on May 3. Applications will remain open until funds are exhausted.
Here’s what you need to know about the RRF:
Who is eligible?
From fine dining restaurants to food trucks, the RRF can offer funding to a business where the public can gather for the primary purpose of being served food or drinks. Eligibility is limited to those who own or operate 20 or fewer establishments as of March 13, 2020, regardless of ownership type and the name the establishment does business as.
Who is not eligible?
Publicly traded companies can’t seek funding, nor can entities that have applied for or received a Shuttered Venue Operators Grant.
How must the funds be used?
RRF grant recipients must use the funds for payroll, paid sick leave, mortgage or rent obligations, utilities, maintenance (including construction to build outdoor seating), personal protective equipment, cleaning supplies, standard industry inventory and other operational expenses that the SBA approves. However, if all grant funds are not spent by the business, or if the business permanently closes before the end of the covered period, the business must return any unused funds to the U.S. Treasury.
What kind of funding can I receive?
In general, tax-free federal grants are based on a business’s pandemic-related revenue loss, calculated by subtracting 2020 gross receipts from 2019 gross receipts. Pandemic-related revenue losses then must be reduced by any amounts received from first or second draws from the Paycheck Protection Program. Grants will be awarded to eligible applicants for as long as funds remain available.
As with many of the economic relief programs passed since the beginning of the COVID-19 pandemic, it’s possible additional clarity and rule revisions could be issued by the SBA, so be sure to talk to your accountant or tax professional to make sure you’ve got the most up-to-date information on the RRF.
Since the beginning of the pandemic, the network of CPAs, enrolled agents and other tax professionals at PADGETT BUSINESS SERVICES® has helped over 1,500 small businesses secure more than $100 million in pandemic relief funding. If you’re interested in learning more about the RRF or any of the current economic aid programs, find an office near you to set up a consultation.