As part of the American Rescue Plan Act signed March 11, 2021, $ 28.6 billion is allocated to the restaurant Revitalization Fund program. Money from this fund is to be paid as tax-free grants to restaurants, bars and associated food and beverage-related businesses to compensate them for their reduced revenues by 2020.
In general, restaurants can apply for grants equal to gross income 2020 minus gross income in 2019. For companies that are in operation throughout 2019 and 2020, the maximum grant size is $ 5 million for restaurants and $ 10 million for restaurant groups. Grants will not be taxed as income.
According to Forbes.com, " In addition to qualifying as a eligible entity, a company must also show that it has suffered a pandemic-related loss. To do so, a company only needs to show that it had less gross revenue by 2020. than they did in 2019, but PPP loan supplements are considered revenue for this calculation.
Therefore, according to this new law, if your company kept the same pricing, sold a smaller side sale of french fries in 2020 compared to 2019 and received no PPP loan, your restaurant has suffered a pandemic-related loss. "
Quick Takes for Restaurant Revitalization Fund:
- Amounts are given to the restaurant in the form of grants, not a loan. Does not need to be repaid if it is used for operating costs. Grants are not subject to a fee.
- Definition of restaurant as follows: “Dining stand, dining car, dining car, catering company, salon, inn, tavern, bar, lounge, brewpub, rehearsal room, taproom, licensed facility or condition for a beverage producer where the public can taste, try or buy products or any other similar business activity that the public or the protector collects for the primary purpose of being served food or drink. ”
- State or municipal enterprise
- As of 13 March 2020, owns or operates more than 20 sites, regardless of whether the site operates under the same or different names
- Has a pending application for or has been granted a closed site Operator gram  Is a listed company
- Determination of subsidies for existing restaurants:
- Gross income for restaurant 2019
- Less gross income for restaurant 2020
- Smaller amount for any PPP loan from first or second draw
- Apply at SBA.gov. No guidance yet on the application from the SBA
- Priority for granting grants (1) Women-owned (2) Veterans (3) Socio-economically disadvantaged small businesses. The grant process will be open for 21 days.
- Maximum grant of $ 10,000,000 per application and grant limited to $ 5,000,000 per physical location.
- Qualified entity certifies in good faith that uncertainty about current economic conditions necessitates grant applications to support its ongoing operations.
Is your restaurant still looking for tips on how to open safely? Download our supplementary checklist for reopening restaurants.
Sources: Forbes.com, USChamber.com