On March 11, 2021, President Joe Biden signed into law the American Rescue Plan. This stimulus package included $28.6 billion in relief for restaurant operators under the Restaurants Revitalization Fund (RRF) to help aid restaurant operators negatively impacted by COVID-19.
The RRF will be administered by the U.S. Small Business Administration (SBA). Eligible applicants include restaurants, food trucks, bars, and brewpubs that are not a part of an affiliated group with more than 20 locations. An applicant will be eligible to receive a grant of up to $5 million for each individual restaurant or $10 million per restaurant group.
The amount of the grant is calculated by subtracting the applicant’s 2020 revenue from the 2019 revenue. Any Paycheck Protection Program (PPP) aid or any Economic Injury Disaster Loan (EIDL) funds that were received must also be subtracted from the amount of the eligible grant.
Applicants that did not operate for all of 2019 can receive the difference between 12x the average monthly revenue for 2019 and their revenue from 2020. Applicants that did not open until 2020 can receive a grant equal to amount of expenses incurred minus any revenues received.
Once the grant is rewarded, the applicant will have 8 months after the enactment of the program to spend the funds on certain expenditures that include:
- Payroll and benefits (not including employee compensation exceeding $100,000 year)
- Mortgage (no prepayment)
- Rent (no prepayment)
- Repairs and maintenance
- Construction to accommodate outdoor seating
- Supplies (including protective equipment and cleaning materials)
- Food and beverage expenses
- Operational expenses
- Covered supplier costs as defined by the SBA under the PPP program
- Sick Leave
According to the National Restaurant Association, it is estimated that the RRF will be available in May or June. Guidance on how the RRF will work will need to be provided by SBA; Aronson will provide more information on the RRF as it becomes available.
For more information on the Restaurants Revitalization Fund, and/or any other COVID-19 related economic relief, please visit Aronson’s COVID-19 Resources Hub. Our tax specialists are also available for consultation on this for restaurants and hotels. Please contact Aaron Boker or one of our hospitality tax advisors at 301.231.6200 for more information.