CRS In Focus IF11819 — SBA Restaurant Revitalization Fund Grants

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https://crsreports.congress.gov 
 
Updated August 15, 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 In Focus 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 (and 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 at least 50% 
or if an eligible entity has contractual authority to control 
the business’s direction. 
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 Amounts 
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. 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 between February 15, 2020, and March 
11, 2023. Unused funds must be returned to the SBA. 
RRF recipients were required to submit a first spending 
report (whether complete or not) by December 31, 2021, 
and certify that proceeds were used on eligible expenses. 

SBA Restaurant Revitalization Fund Grants 
https://crsreports.congress.gov 
Recipients with funds remaining on December 31, 2021, 
must file another report by December 31, 2022; recipients 
with funds remaining on December 31, 2022, must file a 
report by April 30, 2023. The SBA requested comments on 
the RRF spending certification process on July 15, 2022. 
Applications Exceed $76 Billion 
The SBA completed a seven-day pilot test period for the 
RRF application portal to identify and address any technical 
issues prior to the portal’s opening, which took place at 
noon on May 3, 2021. Participants in the pilot were 
randomly selected from existing PPP borrowers in priority 
groups for the RRF. These participants did not receive RRF 
funds until the application portal was opened to the public. 
RRF applications were submitted through a recognized 
SBA Restaurant Partner (SBA-specified technology 
companies that serve the restaurant industry) or directly on 
the SBA website. Applicants needing assistance preparing 
their applications were directed to contact their local SBA 
district office or call the SBA’s call center support number 
at 1-844-279-8898.  
On May 12, 2021, the SBA announced it had received more 
than 266,000 applications requesting over $65 billion in 
funds, far greater than its $28.6 billion authorized amount. 
Nearly half of the applications were submitted by women, 
veterans, and socially and economically disadvantaged 
business owners. The SBA received requests for $330 
million from businesses with not more than $50,000 in 
revenue (the set-aside for this group was at least $500 
million), $8.14 billion from businesses with revenue of not 
more than $500,000 (the set-aside for this group was at 
least $5 billion), and $15.1 billion from businesses with 
revenue of $500,001 to $1.5 million (the set-aside for this 
group was at least an additional $4 billion).  
Because demand from applicants exceeded the RRF’s 
budgetary authority, the SBA closed the application portal 
to most applicants. Applications were accepted until May 
24 from applicants with revenue up to $50,000 because the 
budget authority set aside for these applicants had not yet 
been exhausted. 
Between May 3, 2021, and May 24, 2021, the SBA 
processed applications from priority groups and held 
applications from non-priority applicants but retained their 
place in the processing queue based on the order in which 
the applications were filed. On May 25, 2021, the SBA 
began processing all non-priority applications with FY2019 
gross revenue less than $50,000. On May 27, 2021, the 
SBA began processing non-priority applicants on a first-
come, first-served basis. 
As of May 26, 2021, the SBA received more than 372,000 
applications requesting over $76 billion in funds and 
distributed about $16 billion to over 63,000 applicants.  
On July 2, 2021, the SBA announced the RRF’s closure. 
The application portal remained open until July 14, 2021, to 
allow applicants to check their status, address payment 
corrections, or ask questions. The SBA also announced that, 
as of June 30, 2021, it had received more than 278,000 
eligible applications requesting over $72.2 billion in grants 
and had provided grants to approximately 101,000 
applicants. Underserved populations received about $18 
billion of the $28.6 billion in grant awards, including about 
$7 billion to women-owned businesses, $6.7 billion to 
businesses owned by socially and economically 
disadvantaged individuals, $2.8 billion to businesses owned 
by representatives of multiple underserved populations, and 
$1 billion to veteran-owned businesses. 
In an August 9, 2022, letter, 73 Members of Congress asked 
the SBA Administrator to award the RRF’s remaining 
unobligated funds. The RRF had nearly $180 million in 
unobligated funds as of August 2022.   
Legal Challenges 
After the SBA launched the RRF, three lawsuits were filed 
challenging the constitutionality of the RRF’s 21-day 
priority application period. Federal courts, including a 
three-judge panel of the U.S. Court of Appeals for the Sixth 
Circuit, ruled against the SBA in each of these lawsuits. 
The courts held that the SBA’s prioritization of RRF funds 
on the basis of social disadvantage because of race and 
gender was unconstitutional under the Equal Protection 
Clause. The court ordered the SBA to fund the plaintiffs’ 
grant applications, if approved, before all later-filed 
applications, without regard to processing time or the 
applicants’ race or gender. The court decisions did not 
affect the SBA’s prioritization for veteran-owned 
businesses in accordance with the law.  
In response to these rulings, the SBA sent letters to 2,965 
priority RRF applicants who had been notified that their 
applications had been approved but had not yet received 
their grant funds, informing them that the agency “will not 
be able to disburse your Restaurant Revitalization Fund 
award.” Instead, those approvals will be paid only once the 
SBA completes processing all previously filed non-priority 
applications and only if the RRF is not first exhausted.  
Legislation 
On April 7, 2022, the House passed H.R. 3807, the 
Restaurant Revitalization Fund Replenishment Act of 2021. 
The bill would provide $42 billion to replenish the RRF. 
Priority is to be provided to previous RRF applicants that 
did not receive an award. The bill also would provide $13 
billion for a Hard Hit Industries Award Program for small 
businesses with not more than 200 employees that suffered 
revenue loss of at least 40% during the pandemic. These 
awards are to be made without regard to what industries 
they operate in, with grants capped at $1 million each. First 
priority is to be provided to businesses that have 
experienced pandemic-related revenue loss of at least 80%. 
Second priority is to be provided to businesses that have 
experienced pandemic-related revenue loss of at least 60%. 
On May 19, 2022, cloture on a motion to proceed to 
consider S. 4008, the Small Business COVID Relief Act of 
2022, was not invoked by a 52-43 vote in the Senate (60 
votes were necessary). The bill would have provided $40 
billion to replenish the RRF and $8 billion for specified 
types of small businesses, including fitness centers, minor 
league sports teams, and live venue service providers. 
Several other RRF-related bills of interest include H.R. 
4568, H.R. 7407, S. 255, and S. 2091. 
Adam G. Levin, Analyst in Economic Development Policy  

SBA Restaurant Revitalization Fund Grants 
https://crsreports.congress.gov | IF11819 · VERSION 14 · UPDATED 
 
IF11819
 
 
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