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![handle is hein.crs/govegco0001 and id is 1 raw text is: Congressional Research Service
Informing the legislitive debate since 1914
Updated June 1, 2022
SBA Restaurant Revitalization Fund Grants
The Small Business Administration's (SBA's) $28.6 billion
Restaurant Revitalization Fund Program (RRF) was
authorized by P.L. 117-2, the American Rescue Plan Act of
2021. The RRF provided grants of up to $5 million per
permanent physical business location (not to exceed $10
million per applicant and any affiliated businesses) to
restaurants and other similar places of business that had
experienced COVID-19-related revenue loss. Unlike most
other SBA programs, there was no limit on the number of
employees for businesses to qualify for a RRF grant.
This Insight summarizes the statutory provisions enacted by
P.L. 117-2 and SBA-issued guidance on the RRF. For more
information, see the SBA's Restaurant Revitalization
Funding Program Guide.
Eligibility Rules
RRF grants were designed to assist applicants in remaining
open or reopening. Permanently closed businesses were not
eligible, and temporarily closed businesses were required to
reopen soon, with eligible expenses incurred by March 11,
2021, at the latest.
To qualify for the RRF, for-profit businesses (together with
their affiliated businesses) may not have owned or operated
more than 20 locations as of March 13, 2020, regardless of
whether those locations do business under the same or
multiple names. For RRF purposes, a business is affiliated
with another if it has an equity or right to profit
distributions of not less than 50% or if an eligible entity has
the contractual authority to control the direction of the
business.
Other ineligible entities included state or local government-
operated businesses, an entity that had received or had a
pending application for the SBA's Shuttered Venue
Operators Grant program, nonprofit organizations, and
publicly traded companies. Certain businesses that had filed
for bankruptcy also were ineligible.
The SBA required RRF applicants to certify that current
economic uncertainty made this funding request necessary
to support the ongoing or anticipated operations.
Grant A ounts
P.L. 117-2 required the SBA to set aside $5 billion for
applicants with 2019 gross receipts of not more than
$500,000 and to distribute the remaining $23.6 billion in an
equitable manner to applicants of different sizes based on
annual gross receipts. To meet this latter directive, the SBA
set aside an additional $4 billion for applicants with 2019
gross receipts from $500,001 to $1.5 million and an
additional $500 million for applicants with 2019 gross
receipts of not more than $50,000 to ensure that the
smallest businesses and those in underserved communities
receive funding.
The SBA also was required to provide priority to small
businesses owned and controlled by women, veterans, and
socially and economically disadvantaged individuals and to
award grants only to these prioritized groups during the
initial 21 days that the program was operational. The SBA
announced that during this period, it would accept
applications from all eligible applicants but would
distribute funds only to applicants that self-certified their
eligibility as a prioritized group. Thereafter, the SBA would
distribute grants in the order in which they were approved.
An applicant's grant award equaled the amount of COVID-
19-related revenue loss (up to the program's limits) the
applicant experienced, as determined by formulas. In the
SBA's RRF Program Guide, these formulas varied, in part,
based on the date an eligible entity began operations (e.g.,
the date it started sales). Separate formulas determined
grant amounts for applicants that began operations on or
before January 1, 2019; partially through 2019; on or
between January 1, 2020, and March 10, 2021, or had not
yet opened for sales but, as of March 11, 2021, had incurred
eligible expenses. The SBA's RRF Program Guide contains
step-by-step calculation instructions.
For example, entities that began operations on or before
January 1, 2019, could receive the difference between their
gross receipts as reported on 2019 and 2020 federal income
tax returns, excluding any amounts received from a list of
specified sources (including the SBA's PPP, Economic
Injury Disaster Loan [EIDL] Program, EIDL Advance
Payment Program, Targeted EIDL Program, and debt relief
payments). If the applicant received a PPP loan or EIDL,
those amounts were subtracted from the RRF grant amount.
Eligible Expenses
Grant proceeds may be used for
business payroll costs (including sick leave),
business utility payments,
business debt service (not including any prepayment of
principal or interest),
business maintenance expenses,
outdoor seating construction,
business supplies (including protective equipment and
cleaning materials),
business food and beverage expenses (including raw
materials),
covered supplier costs, and
business operating expenses.
RRF funds must be used by March 11, 2023, on eligible
expenses incurred beginning February 15, 2020, and ending
March 11, 2023. Unused funds must be returned to the
SBA.](ViewImageLocal?handle=hein.crs/govegco0001&div=1&collection=&method=preview&ext=.png&size=3)