As restaurants, bars, and other food and beverage establishments continue to deal with the impacts of COVID-19 related restrictions leading to losses in profit, The American Rescue Plan Act of 2021 has created a special fund to provide relief as the pandemic lingers.

The Restaurant Revitalization Fund provides $28.6 billion for qualifying restaurants or food and drink service locations impacted by the COVID-19 pandemic between February 15, 2020, and December 31, 2021. Rep. Earl Blumenauer (D-Oregon) said in a press conference with the Independent Restaurant Coalition on March 11 that the U.S. Small Business Administration will likely begin accepting applications for the Restaurant Revitalization Grants “within weeks, not months.”

Of the $28.6 billion set aside, $5 billion will be available for eligible entities with gross receipts of no more than $500,000 during 2019, while $23 billion will be available for eligible entities of different sizes based on annual gross receipts. The SBA may adjust distribution of funds as necessary based on demand and the relative local costs in the markets in which eligible entities operate.

Who’s Eligible?

Eligible entities include restaurants, food stands, food trucks, food carts, caterers, saloons, inns, taverns, bars, lounges, brewpubs, tasting rooms, taprooms, a 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. This extends to any of these entities with locations in an airport terminal and those that are tribally owned.

Entities not eligible are those that owned or operated, together with any affiliated business, more than 20 locations between February 15, 2020, and December 31, 2021, regardless of whether those locations do business under the same or multiple names; has applied for or has received a grant under section 324 of the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act; or are publicly traded.

How Much Are the Grants Worth?

Grants will be capped at $5 million per physical location or $10 million per eligible entity for less than 20 locations. The SBA will award grants in the order it receives applications. However, the SBA will prioritize small businesses owned and controlled by women, veterans, or those that are socially and economically disadvantaged during the initial 21-day period.

The amount of a grant made to an eligible entity will be equal to the pandemic-related revenue loss of the eligible entity. Any grant issued based on estimated receipts that is greater than the actual gross receipts of the eligible entity in 2020 must be returned to the Treasury.

What Can the Grants be Used For?

During the covered period, an eligible entity that receives a grant may use the funds for the following expenses incurred as a direct result of, or during, the COVID–19 pandemic:

• Payroll costs
• Mortgage payments of principal or interest, not including any prepayments of principal
• Rent payments, including rent under a lease agreement, not including any prepayments
• Utilities
• Maintenance expenses, including construction to accommodate outdoor seating such as walls, floors, deck surfaces, furniture, fixtures and equipment
• Supplies, including protective equipment and cleaning materials
• Food and beverage expenses within the scope of the eligible entity’s normal business practice before the covered period
• Covered supplier costs, as defined in section 7A(a) of the Small Business Act
• Operational expenses
• Paid sick leave
• Any other expenses the SBA determines to be essential to maintaining the eligible entity

Eligible entities must make a good faith certification that the grant will help the applicant continue operations during the uncertain current economic conditions. If an eligible entity fails to use all grant funds or permanently ceases operations on or before the last day of the covered period, the eligible entity must return any funds not used for allowable expenses to the Treasury.

GET PREPARED NOW

There are three things which will be required to submit an application you can start working on now:

1. Sign up for a free Data Universal Numbering System number (DUNS) from Dunn and Bradstreet by clicking here.
2. Register with the US Federal Government’s System for Award Management (SAM). This is free and can take up to two weeks to process.
3. Send a SAM notarized letter to the Federal Service Desk (FSD).

NEED HELP?

Ericksen Krentel continues to monitor the ever-changing guidance and requirements for COVID-19 pandemic assistance to assist you in receiving the maximum benefits allowable. Our team is ready to help create a customized approach for your organization to effectively, and correctly, apply for relief.

As questions or concerns arise, we ask that you contact us so we can address them as quickly as possible to ensure we continue to meet your needs. As a reminder, you can always monitor our COVID-19 Updates webpage by clicking here for the latest or monitoring our accounts on LinkedIn, Twitter or Facebook.

About Ericksen Krentel

Ericksen Krentel CPAs and Consultants, founded in New Orleans, Louisiana in 1960 with offices in New Orleans and Mandeville, believes that serving as the clients’ most trusted adviser is grounded in going beyond the numbers.

That includes helping clients achieve their business and personal financial goals by providing innovative and exceptional services in the following areas: audit and assurance services, tax compliance and planning, outsourced CFO services and business valuations for a variety of industries; employee benefit plan audits; fraud and forensic accounting; business planning; IT consulting; loss calculations; and estate planning.

Learn more at www.ericksenkrentel.com.

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