Earlier this year, The U.S. Small Business Administration (SBA) allocated $28.6 billion dollars to the Restaurant Revitalization Fund (RRF), a grant program announced as part of the American Rescue Plan Act. Tomorrow, on Friday, April 30, 2021 at 9 a.m. EDT, registration on the SBA portal for the RRF will begin.
Though registration begins tomorrow, Friday, April 30th, the SBA will begin taking applications for the RRF on Monday, May 3, 2021 at 12 p.m. noon EDT. The first 21 days of the application process are reserved for priority funding: 51% female-owned or controlled businesses; veterans; or socially and economically disadvantaged borrowers. Regardless, the SBA is encouraging all applicants to apply on May 3, 2021 or as soon as possible thereafter.
Loan Mantra is available to help you navigate the RRF grant process so you can get back to nourishing the people and communities around you. Here are the four things you should know before you apply:
Who qualifies for the RRF?
The RRF grant program seeks to offer funding to a variety of businesses in the food industry. This not only includes full-service restaurants but catering companies; food trucks; snack stands; gastropubs, wineries; distilleries; and licensed facilities of beverage alcohol producers where the public may taste, sample, or purchase products. Some inns may also qualify for RRF so long as 33% of gross receipts from 2019 indicate purchases of on-site food and/or drink.
Who is a qualified applicant? The applicant is the entity that will apply for the grant, using their EIN number. A restaurant with multiple locations under the same EIN must apply for all of its locations with a single application. However, applicants may not apply on behalf of other entities such as affiliates or subsidiaries. The SBA offers this example:
“ABC Company owns three restaurants that each have their own EIN and each file their own Federal income tax returns. Each of ABC’s restaurants must file their own separate Restaurant Revitalization funding application unless they received Paycheck Protection Program (PPP) loans under ABC Company.”
What about franchises? The SBA’s franchise exception offers eligibility to businesses listed on the SBA Franchise Directory and those with a franchise identifier code.
Is there an instance in which an entity is ineligible? If an owner owns or operates more than 20 locations, regardless of business type, they are ineligible for RRF. Applicants who received or have pending Shuttered Venue Operators Grants (SVOG) are also ineligible for RRF.
How can funds be used?
Eligible expenses for RRF are much the same as PPP debt forgiveness with some important additions, including its timeline. In particular, while the RRF grant will be disbursed until funds run out, an eligible business can continue to use their funds through March, 2023. Eligible use of funds include:
- Operating expenses defined as necessary and mandatory business expenses that are incurred through normal business operation (e.g. rent, equipment, supplies, inventory, accounting, training, legal, marketing, insurance, licenses, fees)
- Please note: business operating expenses do not include expenses that are incurred outside the company’s day-to-day activities
- Business supplies, including PPE (protective equipment) and cleaning materials
- Food and beverage expenses
- This includes raw materials for the making of certain alcohols, i.e., beer, wine or spirits
- Maintenance expenses for furniture, fixtures, equipment, walls, floors, and decks
- Construction of outdoor seating
- Past-due expenses are also considered eligible so long as they were incurred between February 15, 2020 and March 11, 2023
Basic calculation of funds:
The easiest way to estimate funding is to deploy this equation:
Business Revenue from 2019 – Business Revenue from 2020 – PPP 1.0 – PPP. 2.0 = RRF
What should I know about applying:
If an eligible business or entity uses a POS (Point-of-Sale) Restaurant system, they will likely go through this current partner to apply for the RRF program. The SBA has affiliated with multiple POS Restaurant systems and recognized technology partners to meet the demand for grant funding.
For small business owners or other eligible applicants who don’t currently use a POS system, Loan Mantra is here to help you easily apply for RRF! It’s simple. Create or update your Loan Mantra profile online today. We’ll help you navigate the rest, bite by bite and course by course.