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On March 11, 2021, the American Rescue Plan Act (ARPA) became public law, establishing the Restaurant Revitalization Fund (RRF). The ARPA appropriated $28.6 billion for the U.S. Small Business Administration (SBA) to provide financial assistance to restaurants, bars, and other similar places of business that suffered revenue losses related to the COVID-19 pandemic. The SBA is and will continue accepting applications for RRF funds subject to the availability of these funds. The appropriated funds will remain available until expended. Priority of the grants may be given to an applicant that is: 1) a small business concern that is at least 51% owned by one or more individuals who are women, veterans, or socially and economically disadvantaged and 2) managed or controlled by one or more women, veterans, or socially and economically disadvantaged individual.
Eligible applicants are “entities who have experienced pandemic-related revenue loss” and include the following:
* In order to be eligible for RRF funds, bakeries, brewpubs, tasting rooms, taprooms, breweries, microbreweries, wineries, and distilleries, must provide documentation with their applications that on-site sales comprised at least 33% of gross receipts in 2019. For businesses that opened in 2020 or that have not yet opened, the Applicant’s original business model should contemplate that on-site sales to the public comprise at least 33% of gross receipts.
** In order to be eligible for RRF funds, inns must provide documentation with their application that on-site sales of food and beverage comprised at least 33% of gross receipts in 2019. For inns that opened in 2020 or that have not yet opened, the Applicant’s original business model should contemplate that on-site sales comprise at least 33% of gross receipts.
Funds obtained from the RRF must be used for eligible expenses listed below incurred beginning February 15, 2020, and March 11, 2023. In other words, RRF funds can be sought for eligible expenses already incurred (and even paid) and eligible expenses that have not yet been incurred:
An application for funds from the RRF must be made on SBA Form 3172 and the Applicant must certify, under penalty of law that:
All funds received from the RRF must be deposited into the “applicant’s commercial business account.” If the business is a sole proprietorship, without a commercial account, the SBA will require “supporting documentation to demonstrate that this account is used for restaurant operations, and it is owned by the sole proprietor.”
All Applicants have until March 11, 2023, to use RRF funds. “Not later than December 31, 2021, all Applicants are required to report through the application portal how much of their award has been used against each eligible use category.” If the Applicant fully expends its funds prior to December 31, 2021, it will be asked to certify in the application portal that proceeds have been used on eligible expenses. All Applicants that do not fully expend their RRF funds prior to December 31, 2021, are required to complete annual reporting submissions until the Applicant has fully expended its RRF funds or the period of performance expires.
The amount an applicant is eligible to receive is as follows:
“Gross receipts” means all revenue in whatever form received or accrued from whatever source, including revenue from the sales of products or services, interest, dividends, rents, royalties, fees, or commissions, reduced by returns and allowances.
Further, the amount of PPP funds that an Applicant has received will impact the amount of RRF funds the Applicant may be eligible to receive.
The Restaurant Revitalization Fund provides an opportunity for eating establishments to procure much-needed financial relief due to the COVID-19 pandemic. But, as with many grant and aid programs, funds are limited and will be disbursed on a “first-come, first-served basis.” The food, beverage, and hospitality attorneys at Norris McLaughlin are prepared to assist with the application process.
This legal advisory was written by John F. Lushis, Jr., and Theodore J. Zeller III, Chair of the Norris McLaughlin Liquor Law, Licensing, Manufacturing, and Distribution Industry Group. If you have any questions about this post or any related matters, please feel free to contact John at jlushis@norris-law.com or Ted at tzeller@norris-law.com.
This legal advisory provides information to our clients and friends about current legal developments of general interest in the area of food, beverage, and hospitality law. The information contained in this advisory should not be construed as legal advice, and readers should not act upon such without professional counsel. Copyright © 2021 Norris McLaughlin, P.A.
