On March 11, 2021, President Joe Biden signed the American Rescue Plan into law. This $1.9 trillion COVID-19 relief package marked a hopeful moment for struggling members of the food industry as it included something called the Restaurant Revitalization Fund (RRF).
In short, the RRF directs a portion of American Rescue Act toward grant money for small to midsize businesses in the food industry. In this case, “restaurant” is used as an umbrella term that extends to multiple types of food businesses. This includes food trucks, which are listed as one of the eligible businesses.
If you are a food truck owner, you probably have questions about what the RRF means for your business.
If you’re ready to apply, click this link to go to the SBA website and start the application.
Below, we will give you a breakdown of what we know right now – and keep you updated as more information comes out!
The Restaurant Revitalization Fund: The Basics
In a nutshell, the Restaurant Relief Act:
- Includes $28.6 billion in total
- Reserves more than $5 billion for smaller businesses with less than $500,000 in gross receipts in 2019
- Covers expenses dating back to February 15, 2020 that can include mortgage, rent, wages, benefits, and the cost of building outdoor eating areas
Grants are capped at $10 million for restaurant groups and $5 million for individual establishments.
What Is the Timeline?
The timeline is as follows:
- April 30th, 2021: You can register in advance at restaurants.sba.gov
- May/June: The SBA will have a 21 day priority period for women-, veteran-, and disadvantaged/minority-owned businesses
- May 22nd to June: The SBA will open up applications to all eligible businesses
How Do I Apply?
You can go here to begin the application process and get details about how to apply: https://www.sba.gov/funding-programs/loans/covid-19-relief-options/restaurant-revitalization-fund
Here is a webinar on how to apply from the Small Business Administration:
Who Is Eligible?
To be eligible for a grant, you must:
- Own and operate no more than 20 total locations including affiliate businesses
- Be a restaurant, food stand, food truck, caterer, saloon, inn, bar, tavern, lounge, brewpub, tasting room, or taproom
- Have not received a previous grant under the Shuttered Venue Operator Grant Program
Publicly traded companies and state and local government-operated businesses are also unable to apply.
How Much Money Do I Receive?
As the SBA has yet to release rules, this is not 100% clear. We do know the maximum grant size is $5 million for restaurants and $10 million for restaurant groups.
According to the National Restaurant Association, the grant amount will be calculated by subtracting 2020 revenues from 2019 revenues. Restaurants can also ask for additional funds to pay for things like sick leave for employees.
Grant size will depend on factors like financial need, the number of employees, and the amount of money left in the RRF when your application is processed. We will keep you updated as we learn more.
Is Everyone Guaranteed A Grant?
Unfortunately, no. there is a limited amount of money available, so it is more than likely the SBA will have to make tough choices when allocating grant money.
As previously mentioned, the grant does seek to prioritize women-, veteran-, and disadvantaged/minority-owned businesses. If you fall into any of these categories, you can apply during the initial 21-day period.
The good news is, there is a chance the bill could be renewed. Senator Chuck Schumer stated Congress is open to renewing the bill once the money runs out.
How Can I Improve My Chances?
This is another aspect of the grant that is up in the air. We will have more information on that once application details are released in full.
Applying early can’t hurt and could potentially increase your chances depending on the order in which applications are processed. If you are able to apply during the initial 21-day window, we encourage you to do so.
What Information Do I Need To Apply For A RRF Grant?
You can look at a sample application here for full details.
You will need the following documentation:
- Verification for Tax Information: IRS Form 4506-T.
- Gross Receipts Documentation, which can include any of the following:
- Business tax returns (IRS Form 1120 or IRS 1120-S)
- IRS Forms 1040 Schedule C
- IRS Forms 1040 Schedule F
- Partnership’s IRS Form 1065 (including K-1s)
- Bank statements
- Externally or internally prepared financial statements
- Point of sale report, including IRS Form 1099-K
Additionally, if you have a brewpub, tasting room, taproom, brewery, wintery, distillery, bakery, or inn, you will need to demonstrate onsite food and beverage sales comprised at least 33% of your income.
You will need to provide basic information such as:
- A list of all owners of 20% or more of the equity of the applicant
- The names of all owners
- Your business’s Tax Identification Number
- ACH information for account funds will be deposited
- Your type of organization (e.g., S-Corporation, C-Corporation, Sole Proprietorship)
In addition to this, the application has a series of questions regarding any other grants you received, whether you are bankrupt or permanently closed, and whether you drew money from the Paycheck Protection Program.
You will also provide detailed financial information for both 2019 and 2020. This includes:
- Gross receipts from each year
- Gross expenses
- The total amount of loans or grants you received
You will then have to select the reasons you are applying for a grant such as covering operating costs, covering payroll costs, paying for maintenance expenses, and so on.
There is also the normal demographic information about things like veteran status, gender, race, and ethnicity.
We will continue to update this article with information about the RRF as it comes in. Check back regularly to stay up-to-date about applications so you can apply ASAP!