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![handle is hein.crs/govegcq0001 and id is 1 raw text is: 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 providedgrants of up to $5 million per
permanent physical business location (not to exceed $10
million per applicant andany affiliated businesses) to
restaurants and other similarplaces of business thathad
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-is sued guidance on the RRF. For more
information, see the SBA's Restaurant Revitalization
Funding ProgramGuide.
Eligibility Rues
RRF grants were designedto assist applicants in remaining
open or reopening. Permanently closed businesses were not
eligible, and temporarily closedbusinesses were required to
reopen soon, with eligible expenses incurredby 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 s ame or
multiple names. P.L. 117-2 provided that, for the purposes
of the RRF, 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 entities not eligible for the RRF included state or
localgovernment-operated businesses, an entity that had
received orhad a pendingapplicationforthe SBA's
Shuttered Venue Operators Grant program, nonprofit
organizations, and publicly traded companies. Certain
businesses that had filed for b ankrup tcy also were
ineligible.
The SBA also required RRF applicants to certify that
current economic uncertainty [made] this funding request
necessary to support the ongoing or anticipated operations.
This certification, which was first required on applications
for SBA's Paycheck Protection Program(PPP) loans, has
been subjectto evolving agency guidance. In the PPP
context, SBA requires that the borrowerpass a business
activity as sessment and a liquidity assessment, each of
which require detailed responses on SBA Form3059.
Grant Amounts
P.L. 117-2 required the SBA to set aside $5 billion for
applicants with 2019 gros s receipts ofnotmore than
$500,000 and to distribute the remaining $23.6 billion in an
equitable manner to applicants of different sizes based on
annualgross 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 $500million 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 toprovide priority to small
businesses owned and controlled by women, veterans, and
socially and economically disadvantagedindividuals and to
award grants only to these prioritized groups during the
initial 21 days that the programwas operational. The SBA
announced that during this period, it would accept
applications fromall eligible applicants but would
dis tribute funds only to applicants that s elf-certified their
eligibility as a prioritized group. Thereafter, the SBA would
dis tribute grants in the order in which they were approved.
An applicant's grant award was equalto the amountof
COVID-19-related revenue los s (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 thedate an eligible entity began operations
(e.g., the date it s tarted s ales). Separate formulas
determined grant amounts for applicants that began
operations on orbefore January 1, 2019; partially through
2019; on orbetween January 1, 2020, and March 10, 2021,
or applicants thathadnotyet opened for sales but, as of
March 11, 2021, had incurred eligible expenses. The SBA's
RRF ProgramGuide contains step-by-step calculation
instructions.
For example, entities thatbegan operations on orbefore
January 1, 2019, could receive the difference between their
gross receipts as reported on2019 and 2020 federalincome
taxreturns, excluding any amounts receivedfroma list of
specified sources (includingthe SBA's PPP, Economic
Injury Dis aster Loan [EIDL] Program, EIDL Advance
Payment Program, Targeted EIDLProgram, and debtrelief
payments). If the applicantreceived aPPP loan orEIDL,
those amounts were subtracted fromthe RRF grant amount.
Eligibke Expenses
Grant proceeds may be used for
businesspayrollcosts (including sickleave);
businessutility payments;
businessdebt service (not including any prepayment of
principal or interest);
Updated September 29, 2021](ViewImageLocal?handle=hein.crs/govegcq0001&div=1&collection=&method=preview&ext=.png&size=3)