Understanding the Restaurant Revitalization Fund

In its sweeping COVID relief bill, the United States government has included $28.6 billion of relief targeted directly at restaurants, which is to be administered by the Small Business Administration (SBA). Unlike the Payroll Protection Program, which has been helping restaurants and a wide swathe of other businesses, the Restaurant Revitalization Fund is designated specifically for establishments with the primary purpose of serving food and drink to the public. This means every style of foodservice establishment, from saloons to sit-down restaurants, is included in the bill.

However, there are limitations based on business size; the bill is intended to help struggling small- and medium-sized businesses rather than larger chain establishments. We'll go over the specifics of the Restaurant Revitalization Grants, who is eligible, and what they can be used for.

Who Gets the Restaurant Revitalization Fund Money?

The Fund money is available to pretty much every style of foodservice establishment,¹ including restaurants, bars, food trucks, lounges, taverns, and inns. However, there are limitations in place to funnel these funds towards smaller businesses that might not be able to survive without them.

Commercial entities that cannot receive funds include the following:

State and local government-operated businesses
Entities located in airport terminals
Businesses that already received aid under the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act
Business with more than 20 locations
Publicly traded businesses

Most restaurants will be eligible, unless you are part of a large chain with more than 20 individual locations or fit the other categories above. If you do not fall under one of those categories, you'll be eligible for a Restaurant Revitalization Grant.

The money available is limited to a maximum of $5 million per location and $10 million per company.² To ensure small businesses get some of the available money, $5 billion has been set aside specifically for small venues with gross annual receipts less than $500,000.

For the first 21 days, establishments owned by women, veterans, or economically or socially disadvantaged groups will get priority access to the funds,³ and afterwards, they'll be opened to everyone. The SBA is hoping to expedite the process by allowing businesses to use their existing identification paperwork to file for aid, though the exact details were not available immediately. As before, the SBA administrator can extend this 21-day period.

What Can the Restaurant Revitalization Funds Be Used For?

Unlike the Paycheck Protection Program, which provided loans that were forgiven only if the funds were used on payroll, the money from the Restaurant Revitalization Fund is simply a grant to be spent on almost any aspect of your business with a few notable exceptions. You can spend the money on payroll, operational expenses, supplies (including PPE), maintenance, mortgage or rent, sick leave, utilities, and other expenditures. The two big things you'll need to keep in mind are the money must be spent within the specified time period, which is before the end of 2021, and the money cannot be used on payroll for employees making more than $100,000 a year.

The SBA administrator can also expand the list of eligible expenses if it is deemed necessary. If you do not spend all the grant money in the specified time frame (before the end of 2021), you'll owe back whatever money wasn't spent. The same goes if your business closes: Whatever portion of the money has not been spent is owed back.

The Small Business Association has put together a comprehensive examination of pandemic relief options.

How Much Will You Get?

The Restaurant Revitalization Grant for each establishment will be calculated to try and match the revenue lost to the pandemic. For establishments that existed in 2019, the grant will be however much less you made in 2020 than you made in 2019. If your business opened in 2020, the revenue loss will be calculated as the eligible expenses you paid minus how much money you made. If your business was only open for a portion of 2019 or 2020, the rate will be calculated by your available monthly revenue and projected onto the rest of the year.

The money provided by these grants is intended to make up for the money that has been lost due to restaurants and public gathering spaces having to reduce capacity or close throughout the pandemic. With the extra funds available, foodservice establishments will hopefully be able to continue operating and survive until everything can reopen.

The exact amount you'll receive depends on many different factors, including your previous revenue, the location of your business, and whether you received PPP loans. Any PPP loans you received will be subtracted from the amount of money you're now eligible for.

Anything Else?

A lot of the specifics are yet to be ironed out, including how operators should apply for the money. Another major consideration is the $1,400 checks that have been sent to most Americans; this influx of cash will enable your customers to eat out more often than they have been. With delivery, take-out, and safe dine-in options available depending on your state, restaurateurs have the opportunity to recuperate some of the money they've lost because of the pandemic. The specifics of how to access the money available to you may change over time, so ensure you consult the SBA site linked below to get the most up-to-date information possible.

Useful Restaurant Revitalization Fund Links

Specific information about how to apply for these grants was not immediately available, but information will become available as the program develops further. To that end, we've compiled a few links that have more information about receiving aid through this program.

SBA Coronavirus Relief Options: The SBA is administering the relief, so this is a good place to find information and pursue your options.
National Restaurant Association Information: The NRA keeps a catalogue of information for restaurateurs impacted by COVID-19.

Resources

MRM American Rescue Plan for Restaurants. Modern Restaurant Management. Accessed March 2021.
Restaurants Benefit from Covid Relief Bill. US News. Accessed March 2021.
Aid Plan for Restaurants. Eater. Accessed March 2021.