By: Pedro T. Rincon, CPA, CVA, Partner, Osborne Rincon CPAs
The American Rescue Plan Act of 2021 includes, among other things, funding of a $28.6 billion Restaurant Revitalization Fund (the “RRF”), with further guidance expected to be provided by the Small Business Administration (SBA).
WHO IS ELIGIBLE FOR RRF GRANTS?
An eligible business is 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 similar business in which the public or patrons assemble for the primary purpose of being served food or drink.
A business will be deemed disqualified from obtaining an RRF Grant if it:
Is operated by a state or local government;
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 SBA's Shuttered Venue Operators Grant Program; or
Is majority-owned or controlled by a publicly traded company.
HOW MUCH CAN AN RRF GRANT RECIPIENT RECEIVE?
A business that is eligible for an RRF Grant may receive an amount equal to its “pandemic-related revenue loss,” subject to a cap of $5,000,000 per physical location and an aggregate cap of $10,000,000 on RRF Grants to it and its Affiliated Businesses.
In determining the amount of the RRF Grants, pandemic-related revenue losses for an eligible entity are reduced by any amounts received from First Draw PPP Loans and Second Draw PPP Loans.
IS THERE PRIORITY IN AWARDING RRF GRANTS?
Yes – during the initial 21-day period, applications from eligible businesses owned and controlled by women, veterans, or socially- and economically disadvantaged individuals will receive priority.
HOW CAN RRF GRANT PROCEEDS BE USED?
In general, the funds cover a wide array of costs incurred during the pandemic, including outdoor dining construction expenses, spending on personal protection equipment, as well as cleaning and sanitization from February 15, 2020, to December 31, 2021.
I AM ELIGIBLE! HOW DO I APPLY?
For instructions on how to apply please visit: www.sba.gov/funding-programs/loans/covid-19-relief-options/restaurant-revitalization-fund
If you need a tax advisor to ensure you are informed on all the latest tax requirements, please contact Osborne Rincon at (760) 777-9805