SBA Launches Restaurant Revitalization Fund Program

Recently, the Small Business Administration (SBA) opened applications for the Restaurant Revitalization Fund (RRF) program.

The RRF is a relief program totaling $28.6 billion that was started under the American Rescue Plan Act to help revive the restaurant industry and bring jobs back by providing funding for small restaurants that have been the hardest hit by the COVID-19 pandemic.

But how does it work and how can you apply for some of the relief funds to get your restaurant back on its feet? Keep reading to learn more.

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Now that clear directives have been received from Congress, the program has been rolled out to ensure restaurants can make their payroll, buy supplies, and get whatever else is needed to finish transitioning to the restrictions still in place in many parts of the country due to the COVID-19 pandemic.

This includes specific funds set aside for small restaurants based on their 2019 gross receipts with $500 million for applicants that received under $50,000, $5 billion for applicants between $50,000 and $500,000 in receipts, and an additional $4 billion for applicants with receipts between $500,000 and $1.5 million.

Funding of up to $5 million per location, not to exceed $10 million per applicant, is available with a minimum award of $1,000. The funding is not required to be paid back provided it is spent on eligible uses and is completely spent by March 11, 2023.

Rent and loan payments may not be prepaid, but funding can be set aside to pay those expenses at the time when they become due up until March 11, 2023. Funds that are not completely spent by December 31, 2021 will require an annual report to show how the funding is being spent in future years.

You can find information about the program on SBA’s RRF webpage as well as on its RRF Program Guide. If your point-of-sale system is based on Square or Toast, you can apply through those vendors. Otherwise, you'll need to apply through their registration portal with a unique username and password, even if you have another SBA account. If you want to see what goes into the application, you can fill out SBA Form 3172 ahead of time so that you have everything you need for the formal application in one place.

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With your account set up on the registration portal, you'll be able to work on your application. The SBA is currently prioritizing applications from restaurants that are owned by women, socially- and economically disadvantaged individuals, and veterans for the first 21 days until May 23, 2021. After this point, all eligible applications are going to be funded on a first-come, first-served approach until the funds are gone.

To apply, you'll need to gather some documentation to support your claims. If possible, this should include both your tax returns and point-of-sale reports. Scan these because you'll need to upload them. To determine how much you're eligible for, you'll need to look at a couple of details:

• Was your restaurant operating prior to January 1, 2019? If so, use your 2019 gross receipts minus 2020 gross receipts, minus any original PPP loan amounts (first and second draws) to determine your eligibility level.
• If you opened during 2019, use your average 2019 monthly receipts times 12, minus your 2020 gross receipts and original PPP loan amount to determine eligible funding amounts for your application.
• If you opened on or between January 1, 2020 and March 10, 2021, and had eligible expenses, use the amount you spent between February 15, 2020 and March 11, 2020, minus your 2020 gross receipts, minus 2021 gross receipts through March 11, 2021, minus original PPP loan amounts.

But what adds into your gross receipts? For calculating RRF, you don't need to include first or second draw PPP loans, amounts received from Economic Injury Disaster loans, state and local grants, or SBA Section 1112 payments.