Restaurant Relief GrantFranchise News

When Businesses Can Claim $28.6 Billion in Restaurant Relief Grants

The Small Business Administration will likely open up the Restaurant Revitalization Fund grant applications within the next few weeks.

The $1.9 trillion COVID-19 relief bill signed into law last week includes the Restaurants Revitalization Fund, which allocates $28.6 billion in relief for struggling restaurants. The Small Business Administration anticipates opening up the Restaurant Revitalization Fund grant applications within weeks, Rep. Earl Blumenauer (D- Or.) said in a press conference with the Independent Restaurant Coalition.

The fund will divide $23.6 billion into up to $5 million in grants for individual restaurants, bars, caterers, breweries and tasting rooms, or up to $10 million for non-publicly traded restaurant groups affiliated with fewer than 20 locations. The remaining $5 billion is available to businesses with gross receipts of $500,000 or less during 2019.

When Will Grants Become Available?

The official opening date for the Restaurants Revitalization Fund has not yet been set. Senate Majority Leader Chuck Schumer (D- N.Y.) said during last week’s press conference they will “urge the SBA to stand up for relief and set up the program as soon as the bill is signed into law.” Schumer also noted the Senate will first need to confirm Biden’s nominee for Deputy Administrator of the SBA, Dilawar Syed, before the program can begin.

For the first three weeks of the program, the SBA will prioritize awarding grants for small businesses owned and controlled by women, veterans, or socially and economically disadvantaged small business concerns. 

How Can I Apply?

The Restaurants Revitalization Fund will be administered by the SBA, with qualifying restaurants and bars can apply on the official SBA website. The SBA has not listed the fund on its database of “COVID-19 Funding Sources” and there isn’t yet a link to apply.  

Will Franchisees Qualify for the Grants?

As long as franchisees meet the size requirements (under 20 locations as of March 13, 2020) and are not publicly traded entities, they can apply just the same as independent restaurant operators. 

Applicants must prove they suffered a loss of revenue over the past year and cannot have a pending application for a shuttered venue operators grant

How Do I Determine the Size of the Grant?

Businesses will be eligible to receive a tax-free grant equal to the amount of their pandemic-related revenue loss. 

For established restaurants opened in 2018 or earlier, these grants will be calculated by subtracting a business’ 2020 revenue from their 2019 revenue, and also subtracting first- and second-draw PPP loans received in 2020. If the restaurant wasn’t open for the entirety of 2019, grants will be calculated based on an average of 2019 and 2020 monthly revenues.

Restaurants opened in 2020 are eligible to receive funding equal to the “eligible expenses incurred” minus their first- and second-draw PPP loans received last year. If the business is not yet in operation as of the application date, it can receive funding equal to “eligible expenses incurred before the date of enactment.” 

The maximum amount given to any eligible business is $10 million, and will be limited to $5 million per physical location of the business. 

What Can the Money Be Used For?

The grants can be spent on specific eligible expenses, including payroll costs; mortgage payments; rent; utilities; maintenance expenses; supplies; food and beverage expenses; covered supplier costs; operational expenses; paid sick leave; and any other expense determined to be essential to maintaining the business. 

Once the fund is officially open for application, it is anticipated the SBA will publish regulations on eligible expenses, as well as what paperwork restaurants will need to apply.

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