What’s in the $ 29 billion Restaurant Revitalization Fund?
Some half a million independent restaurateurs across the United States celebrated a major victory last week when Congress passed a bailout for small businesses, including billions of dollars in federal aid for restaurants that have suffered financial losses related to.
The $ 28.6 billion Restaurant Revitalization Fund, part of the Biden administration’s $ 1.9 trillion American Rescue Plan Act, will offer direct subsidies to restaurants and other eligible food businesses, providing urgent assistance to establishments in difficulty. Targeted aid doesn’t come too soon – independent restaurateurs across the country have long argued that grants, compared to the loans they have to repay, are essential to keeping their businesses going.
“It’s very clearly a grant, not a loan, and it’s huge, and super, super important,” said Naomi Pomeroy, restaurant owner and founding member of the Independent Restaurant Coalition (IRC), a professional group. trained to help restaurants affected by COVID-19[FEMININE« Jenesauraistropinsistersurlepeuquenousavonsbesoindeplusdeprêtscommeceuxfournisparle. “
Indeed, payday loans, who said they were hampered by restrictions on how funds could be spent and had to take on debt to cover current expenses and operating costs.
The IRC advocated for the revitalization fund, which draws on the, first proposed in April in a letter to Congress.
“For me, this is a lifeline that will allow me to get back on my feet, to rebuild my business so that people are working and functioning in the future,” said Pomeroy. The James Beard Award winner said her 600-square-foot fine-dining restaurant, Beast, was so challenged by the pandemic that she has since converted it into a community market, called Ripe Cooperative.
She compared companies like hers at this point in the pandemic to lifeless bodies in need of emergency help.
“This fund is like the oxygen of CPR,” Pomeroy said. “If we didn’t have this, we would be dead.”
Already, more than 110,000 restaurants – about one in six in the United States – have closed permanently, resulting in the loss of 2.4 million jobs. Small restaurants lost more than $ 135 billion in sales last year, while the industry at large lost $ 240 billion, according to the National Restaurant Association.
Details have yet to be finalized as to when and how the Small Business Administration will award grants to eligible business owners. But some things are already clear. For example, the revitalization fund prioritizes small minority-owned establishments that might otherwise end up at the back of the pack for money and whichpaycheck protection loans.
Which establishments are eligible?
The fund defines restaurants liberally, considering almost any type of business serving food or drink as its primary objective eligible for grants. Restaurants and bars are eligible, as are food stalls, food trucks, food carts, catering companies, saloons, inns, taverns, breweries and licensed alcoholic beverage producers “where the public can taste, taste or buy products, ”says the bill.
During the first 21 days of grants, the SBA will prioritize applications from institutions owned by women, veterans and minorities.
Under the program, $ 5 billion in funding will also be earmarked for smaller independent restaurants, which before COVID-19 earned $ 500,000 or less in a year, so that larger establishments do not swallow up funds. Restaurant chains with more than 20 establishments are totally excluded, as are companies listed on the stock exchange. In general, the SBA will award grants based on the order in which applications are received.
How will the grants be calculated?
Eligible restaurants can expect grants to match their lost income from the pandemic, calculated by taking their income in 2019 and subtracting the income for 2020 and any PPP loans received. For example, a restaurant that earned $ 1 million in 2019 and $ 600,000 in 2020, and which also received a PPP loan of $ 200,000, would be eligible for a revitalization grant of $ 200,000. Economic Disaster Loans (EIDLs) are not deducted from RRF grant amounts. Entities are eligible for grants of up to $ 10 million, or $ 5 million per physical location.
Are there any limits on how the funds can be spent?
Restaurant owners can use federal aid to cover a range of expenses, from payroll to personal protective equipment and other operational expenses. They will likely need to explain how they used their grant money, but the SBA has yet to issue specific guidelines.
“Just because this is a grant doesn’t mean there still won’t be accountability and oversight,” said Aaron Frazier, director of health care and tax policy at the National Restaurant Association, at a press conference on the fund’s implementation. “There might still be reports of what you’re spending this RRF money on for your grants.”
In general, the funds cover a wide range of costs incurred during the pandemic, includingand expenses for personal protective equipment and cleaning and disinfection from February 15, 2020 to December 31, 2021.
Eligible expenses include:
- Personnel costs
- Mortgage payments
- To rent out
- Construction costs of the outdoor dining area
- Individual protection equipment
- Food and drink costs
- Supplier costs
- Operational expenses
- Paid sick leave
- Other expenses
I am eligible. When, where and how to apply?
As the fund was quickly set up, the SBA has yet to devise rules and regulations detailing how companies can apply. The program has yet to open for applications and the agency has yet to release a timeline to start accepting and processing applications for funds.
“We’re still a bit in limbo – we don’t know when the application process will open. The SBA has to take some time with legislation to draft rules and at this point an application will be available,” said Erika Polmar, Executive Director and Co-Founder of IRC. “We are delighted that it has been included in the bailout and look forward to seeing how it plays out. The devil will be in the details of the implementation.”
Given the urgent nature of the fund, Frazier of the National Restaurant Association expects the federal government to act quickly. He expects the agency to publish the rules and applications as early as April.
The 21-day window for women, veterans, and socially and economically disadvantaged business owners would then likely occur in May or June, after which the revitalization fund would be open to all eligible applicants, according to the NRA.
In the meantime, restaurateurs can Register now for a Data Universal Numbering System (DUNS) number, a nine-digit identifier (assigned to businesses by Dun & Bradstreet) that is like a “fingerprint” to businesses, Frazier said. A DUNS number is required to receive government grants.
Also, register with the US Government’s Rewards Management System at SAM.gov to receive payments. Follow the IRC step by step advice on system navigation.
The IRC also recommends that its members collect documents documenting the extent of their pandemic-related revenue losses between 2019 and 2020. Beware of vendors who claim to know how to handle requests throughout the process, as the system has not yet been set up.
Finally, check out the Independent Restaurant Coalition website, saverestaurants.com for up-to-date tips, fact sheets and other resources.