SBA Set to Begin Pilot Period for Restaurant Revitalization Fund

Small Business Administration, United States Small Business Administration logo, April 9, 2018 from:

The American Rescue Plan, enacted on March 11, 2021, allocated $28.6 billion toward the creation of the Restaurant Revitalization Fund (RRF) program. On Saturday, April 17, Isabella Guzman, head of the Small Business Administration (SBA), announced that it would begin a “seven-day pilot period” to allow pre-selected businesses to submit applications for RRF grants over the next two weeks. The pilot participants “will be randomly selected from existing PPP borrowers.” Although the participants will be able to apply during the pilot period, those who qualify for grants will not receive funds until after the application portal is officially launched to the general public. 

After the official launch of the RRF portal to the public, the SBA will focus on applications submitted by “small businesses owned by women, veterans, and socially and economically disadvantaged individuals” during the first 21 days. The SBA defines “socially disadvantaged individuals” as people who “have been subjected to racial or ethnic prejudice or cultural bias because of their identity as a member of a group without regard to their individual qualities.” Persons who are “economically disadvantaged” are those who have experienced an inability “to compete in the free enterprise system” because of “diminished capital and credit opportunities as compared to others in the same business area.” After the initial 21-day period, the SBA will review all other applications. 

Applicants eligible for the RRF program can receive funds equal to losses in revenue that were related to the COVID-19 pandemic, minus the amount of any loans received under the Paycheck Protection Program. However, the funds may not exceed $10 million for each applicant and its affiliated entities, if any.  

According to the SBA, eligible applicants include: 

  • restaurants; 
  • food stands, food trucks, food carts; 
  • caterers; 
  • bars, saloons, lounges, taverns; 
  • snack and nonalcoholic beverage bars; and 
  • licensed facilities or premises of a beverage alcohol producer where the public may taste, sample, or purchase products. 

Additionally, for the following businesses, 33% of the entity’s gross receipts must be from “onsite sales to the public”: 

  • bakeries; 
  • brewpubs, tasting rooms, taprooms; 
  • breweries and/or microbreweries; 
  • wineries and distilleries; and 
  • inns. 

Businesses that receive RRF grants must use the funds for specific expenses, such as payroll costs, rent or mortgage payments, utilities, operating and maintenance costs, construction of outdoor seating areas, and food and beverage expenses. If RRF funds are used for eligible purposes by March 11, 2023, they do not need to be repaid. 

At this time, the SBA has not provided an official launch date for the RRF portal, likely because it does not know what technical issues it will face once the website is fully operational. Given that the Shuttered Venue Operators Grant portal is still suspended “due to technical difficulties,” it seems to be a good idea for the SBA to take a measured approach in its rollout of the RRF portal.

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