Editorial Team
3 min read
If you run a restaurant, cafe, bar, or any other type of business in the food and beverage industry, it’s probably been a difficult year for you. Even if business has been okay (which for many it has not), things have definitely changed, and you’ve had to make adjustments.
Hopefully you’ve been able to access funding through the PPP loans program, or other opportunities through the Small Business Administration (SBA). But, there’s a new one about to go live that you should keep your eye on. The Restaurant Revitalization Fund (RRF) grant is a new federal initiative run by the SBA and designed to help your business stay afloat in this critical moment.
Information about the RRF is still evolving and forthcoming. The following details are current as of April 19, 2021.
What is an RRF grant?
Unlike PPP loans (which are forgivable if you meet certain conditions), RRF grants are just that, grants. If you use them inappropriately, they can convert to loans, so you need to be careful. However, the anticipation is that in most circumstances, this is basically free, non-taxable funding to help you get back on your feet after this troubling era.
Whereas the PPP loans need to primarily support your payroll, an RRF can also cover mortgage/rent payments, utilities, outdoor seating expenses, maintenance, supplies, and more. Eligible expenses should be incurred between February 15th, 2020 and December 31, 2021, although that end date might be extended.
Am I eligible for an RRF grant?
If you sell food or drink as a primary part of your business, you likely qualify for an RRF grant. In addition to traditional restaurants and eateries, this extends to food stands, food trucks, and caterers. Also included are bars, brewpubs, tasting rooms, taprooms, and licensed facilities where people can sample, taste, or purchase products.
The few exclusions are government-operated businesses (both State and local governments), publicly-traded companies, and businesses that own or operate more than 20 locations. Additionally, any business drawing funds or with a pending application from the “Save our Stages Act” are ineligible.
How much can I receive through an RRF grant?
The math here is pretty easy! Grants top out at $5 million for each location. Grants are calculated with the following formula.
2019 gross receipts – 2020 gross receipts – value of PPP loans received = estimated RRF grant
So, if you had gross receipts of $750K in 2019, $400K in 2020, and got $125K in PPP loans, you would be able to get $225K from the RRF.
$750,000 – $400,000 – $125,000 = $225,000
If you were not open for the entirety of 2019, your starting figure is your average monthly gross receipts x 12.
If you opened in 2020 or beyond, fear not! There are other calculations you can use to find your grant amount as you fill out paperwork.
What are my next steps?
With the program continuously evolving, it’s best to check in on the SBA website for the most up-to-date announcements as well as the National Restaurant Association’s fact sheet.
You should also consider joining our webinar on RRF grants. It will take place on Wednesday, April 28th at 1:30pm EDT (10:30am PDT). The event is free, but registration is required. Sign up here.
In the meantime, be prepared with your sales reports and tax documents to facilitate a smooth application process.
This information is provided for informational purposes only and should not be construed as legal, financial, or tax advice. Readers should contact their attorneys, financial advisors, or tax professionals to obtain advice with respect to any particular matter.
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