Who Is an Eligible Entity?
A restaurant, food stand, food truck, food cart, caterer, saloon, inn, tavern, bar, lounge, brewpub, tasting room, taproom, licensed facility or premise of a beverage alcohol producer where the public may taste, sample, or purchase products, or other similar place of business in which the public or patrons assemble for the primary purpose of being served food or drink; including an entity located in an airport terminal or that is a Tribally-owned concern.
Who Is Not an Eligible Entity?
An entity described above that:
- Is a state or local government-operated business;
- As of March 13, 2020, owns or operates (together with any affiliated business) more than 20 locations, regardless of whether those locations do business under the same or multiple names;
- Has a pending application for or has received a grant under Section 324 of the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act; or
- Is publicly traded.
How Much Can an Eligible Entity Receive in Funding?
An eligible entity can receive a grant equal to the Pandemic-Related Revenue Loss of the entity (please see the definition below). However, this amount is subject to certain limits. Specifically, grants made to eligible entities cannot exceed $10 million, and are limited to $5 million per physical location.
How Much Money Is Available?
Available in grants from the American Rescue Plan's Restaurant Revitalization Fund will total $28.6 billion. Given the number of possible eligible entities, this money is likely to go quickly. Eligible entities should apply as soon as applications become available in order to improve their chances of getting a grant.
Will Certain Grants Be Prioritized?
Yes. During the initial 21-day period in which the Administrator awards grants under this subsection, they will prioritize grants to eligible entities that are small business concerns:
- Owned and controlled by women (as defined in section 3(n) of the Small Business Act (15 U.S.C. 632(n)));
- Owned and controlled by veterans (as defined in section 3(q) of such Act (15 U.S.C. 632(q))), or socially; and
- That are economically disadvantaged (as defined in section 8(a)(4)(A) of the Small Business Act (15 U.S.C. 637(a)(4)(A))).
Is It a Loan or a Grant?
It is a grant, which means there are no repayment obligations. Although, if an entity does not use all grant funds, or permanently ceases operations on or before December 31, 2021 (the last day of the Covered Period, unless this date is changed by the Administrator), the eligible entity must return any remaining funds to the U.S. Treasury.
Who Will Be Administering the Fund?
The Small Business Administration will administer the fund.
When Can Restaurants Access the Fund?
The Small Business Administration will take time to set up rules for the fund, after which applications will be made available.
Do Applicants Have to Make Certifications?
Yes. Applicants must make a good faith certification that "the uncertainty of current economic conditions makes necessary the grant request to support the ongoing operations of the eligible entity."
What Expenses Can Businesses Use Grant Funds For:
- Payroll costs;
- Payments of principal or interest on any mortgage obligation (cannot be used for prepayment);
- Rent payments, including rent under a lease agreement (cannot be used for prepayment);
- Utilities;
- Maintenance expenses including:
- Construction to accommodate outdoor seating; and
- Walls, floors, deck surfaces, furniture, and equipment.
- Supplies, including protective equipment and cleaning materials;
- Food and beverage expenses that are within the scope of normal business practice of the eligible entity;
- Covered supplier costs, as defined in section 7A(a) of the Small Business Act;
- Operational Expenses;
- Paid sick leave; and
- Any other expenses that the Administrator determines to be essential to maintaining the eligible entity.
Are There Any Express Limitations on Spending?
Yes. If a private fund (please see definition below) has an ownership interest in a company, that company cannot use grant funds (in excess of 10 percent of net operating profits for the year ending December 31, 2021) to pay any fees or other expenses to:
- A person registered as an investment adviser who advises a private fund, including:
- Any affiliate of such adviser;
- Any executive of such advisor or affiliate; or
- Any employee or person with a contractual relationship to provide services for or on behalf of such adviser or affiliate.
Do Past PPP Loans Reduce Eligibility?
Yes. An eligible entity's Pandemic-Related Revenue Loss will be reduced by the amount of any PPP loans received.
Relevant Definitions:
Affiliated Business means a business in which an eligible entity has an equity or right to profit distributions of not less than 50 percent, or in which an eligible entity has the contractual authority to control the direction of the business, provided that such affiliation shall be determined as of any arrangements or agreements in existence as of March 13, 2020.
Pandemic-Related Revenue Loss means the gross receipts, of the eligible entity during 2020 subtracted from the gross receipts of the eligible entity in 2019, if such some is greater than zero.
- If the eligible entity was not in operation for all of 2019, Pandemic-Related Revenue Loss will be the difference between: 12x the average monthly gross receipts in 2019, and 12x the average monthly gross receipts in 2020.
- For those not in operation until 2020, the entity can receive a grant equal to the amount of payroll costs incurred by the entity minus any gross receipts received.
- For entities that have not yet opened as of the time of their application but have incurred payroll costs as of the date of enactment of the legislation, the entity can receive a grant equal to such payroll costs.
- Pandemic-Related Revenue Losses for an eligible entity will be reduced by the amount of any PPP loans received.
Covered Period means the period beginning February 15, 2020, and ending December 31, 2021, or another date to be determined by the Administrator.
Payroll Costs has the meaning given the term in section 7(a)(36)(A) of the Small Business Act (15 U.S.C. 636(a)(36)(A)), except that such term shall not include: (A) qualified wages (as defined in sub-section (c)(3) of section 2301 of the Cares Act) taken into account in determining the credit allowed under such section 2301; or (B) premiums taken into account in determining the credit allowed under section 6432 of the Internal Revenue Code of 1986.
Private Fund means an issuer that would be an investment company, as defined in the Investment Company Act of 1940 (15 U.S.C. 80a–1 et seq.), but for paragraph (1) or (7) of section 3(c) of that Act (15 U.S.C. 80a–3(c)).
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