Congressional Research Service IF11819.12 (SBA Restaurant Revitalization Fund Grants)
Summary
A Congressional Research Service product, IF11819 (version 12), updated June 1, 2022, on the Small Business Administration's $28.6 billion Restaurant Revitalization Fund (RRF), authorized by P.L. 117-2, the American Rescue Plan Act of 2021. It states that the RRF provided grants of up to $5 million per physical business location to restaurants and similar businesses that had experienced COVID-19-related revenue loss, with no limit on the number of employees. It describes the requirement that SBA award grants only to businesses owned and controlled by women, veterans, and socially and economically disadvantaged individuals during the initial 21 days, and summarizes the statutory provisions and SBA-issued guidance on the program.
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Updated June 1, 2022
SBA Restaurant Revitalization Fund Grants
The Small Business Administration’s (SBA’s) $28.6 billion The SBA also was required to provide priority to small
Restaurant Revitalization Fund Program (RRF) was businesses owned and controlled by women, veterans, and
authorized by P.L. 117-2, the American Rescue Plan Act of socially and economically disadvantaged individuals and to
2021. The RRF provided grants of up to $5 million per award grants only to these prioritized groups during the
permanent physical business location (not to exceed $10 initial 21 days that the program was operational. The SBA
million per applicant and any affiliated businesses) to announced that during this period, it would accept
restaurants and other similar places of business that had applications from all eligible applicants but would
experienced COVID-19-related revenue loss. Unlike most distribute funds only to applicants that self-certified their
other SBA programs, there was no limit on the number of eligibility as a prioritized group. Thereafter, the SBA would
employees for businesses to qualify for a RRF grant. distribute grants in the order in which they were approved.
This Insight summarizes the statutory provisions enacted by An applicant’s grant award equaled the amount of COVID-
P.L. 117-2 and SBA-issued guidance on the RRF. For more 19-related revenue loss (up to the program’s limits) the
information, see the SBA’s “Restaurant Revitalization applicant experienced, as determined by formulas. In the
Funding Program Guide.” SBA’s RRF Program Guide, these formulas varied, in part,
based on the date an eligible entity began operations (e.g.,
Eligibility Rules the date it started sales). Separate formulas determined
RRF grants were designed to assist applicants in remaining grant amounts for applicants that began operations on or
open or reopening. Permanently closed businesses were not before January 1, 2019; partially through 2019; on or
eligible, and temporarily closed businesses were required to between January 1, 2020, and March 10, 2021, or had not
reopen soon, with eligible expenses incurred by March 11, yet opened for sales but, as of March 11, 2021, had incurred
2021, at the latest. eligible expenses. The SBA’s RRF Program Guide contains
step-by-step calculation instructions.
To qualify for the RRF, for-profit businesses (together with
their affiliated businesses) may not have owned or operated For example, entities that began operations on or before
more than 20 locations as of March 13, 2020, regardless of January 1, 2019, could receive the difference between their
whether those locations do business under the same or gross receipts as reported on 2019 and 2020 federal income
multiple names. For RRF purposes, a business is affiliated tax returns, excluding any amounts received from a list of
with another if it has an equity or right to profit specified sources (including the SBA’s PPP, Economic
distributions of not less than 50% or if an eligible entity has Injury Disaster Loan [EIDL] Program, EIDL Advance
the contractual authority to control the direction of the Payment Program, Targeted EIDL Program, and debt relief
business. payments). If the applicant received a PPP loan or EIDL,
those amounts were subtracted from the RRF grant amount.
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
Eligible Expenses
Grant proceeds may be used for
Operators Grant program, nonprofit organizations, and
publicly traded companies. Certain businesses that had filed
for bankruptcy also were ineligible. business payroll costs (including sick leave),
business utility payments,
The SBA required RRF applicants to certify that current
economic uncertainty made this funding request “necessary
business debt service (not including any prepayment of
to support the ongoing or anticipated operations.” principal or interest),
business maintenance expenses,
Grant Amounts outdoor seating construction,
P.L. 117-2 required the SBA to set aside $5 billion for business supplies (including protective equipment and
applicants with 2019 gross receipts of not more than cleaning materials),
$500,000 and to distribute the remaining $23.6 billion in an business food and beverage expenses (including raw
equitable manner to applicants of different sizes based on materials),
annual gross receipts. To meet this latter directive, the SBA
set aside an additional $4 billion for applicants with 2019 covered supplier costs, and
gross receipts from $500,001 to $1.5 million and an business operating expenses.
additional $500 million for applicants with 2019 gross
receipts of not more than $50,000 “to ensure that the RRF funds must be used by March 11, 2023, on eligible
smallest businesses and those in underserved communities expenses incurred beginning February 15, 2020, and ending
receive funding.”
https://crsreports.congress.gov
SBA Restaurant Revitalization Fund Grants
March 11, 2023. Unused funds must be returned to the announced that, as of June 30, 2021, it had received more
SBA. than 278,000 eligible applications requesting over $72.2
billion in grants and had provided grants to approximately
RRF recipients are required to report their spending 101,000 applicants. Underserved populations received
(whether complete or not) by December 31, 2021, and approximately $18 billion of the $28.6 billion in grant
certify that the proceeds were used on eligible expenses. awards, including about $7 billion to women-owned
More information on this certification process likely will be businesses, $6.7 billion to businesses owned by socially and
detailed in future SBA regulations and guidance. economically disadvantaged individuals, $2.8 billion to
businesses owned by representatives of multiple
Applications Exceed $76 Billion underserved populations, and $1 billion to veteran-owned
The SBA completed a seven-day pilot test period for the businesses.
RRF application portal to identify and address any technical
issues prior to the portal’s opening, which took place at Legal Challenges
noon on May 3, 2021. Participants in the pilot were After the SBA launched the RRF, three lawsuits were filed
randomly selected from existing PPP borrowers in priority challenging the constitutionality of the RRF’s 21-day
groups for the RRF. These participants did not receive RRF priority application period. Federal courts, including a
funds until the application portal was opened to the public. three-judge panel of the U.S. Court of Appeals for the Sixth
Circuit, ruled against the SBA in each of these lawsuits.
RRF applications were submitted through a recognized The courts held that the SBA’s prioritization of RRF funds
SBA Restaurant Partner (SBA-specified technology on the basis of social disadvantage because of race and
companies that serve the restaurant industry) or directly on
gender was unconstitutional under the Equal Protection
the SBA website. Applicants needing assistance preparing Clause. The court ordered the SBA to fund the plaintiffs’
their applications were directed to contact their local SBA grant applications, if approved, before all later-filed
district office or call the SBA’s call center support number
applications, without regard to processing time or the
at 1-844-279-8898. applicants’ race or gender. The court decisions did not
On May 12, 2021, the SBA announced it had received more affect the SBA’s prioritization for veteran-owned
than 266,000 applications requesting over $65 billion in businesses in accordance with the law.
funds, far greater than its $28.6 billion authorized amount. In response to these rulings, the SBA sent letters to 2,965
Nearly half of the applications were submitted by women, priority RRF applicants who had been notified that their
veterans, and socially and economically disadvantaged
applications had been approved but had not yet received
business owners. The SBA received requests for $330 their grant funds, informing them that the agency “will not
million from businesses with not more than $50,000 in be able to disburse your Restaurant Revitalization Fund
revenue (the set-aside for this group was at least $500
award.” Instead, those approvals will be paid only once the
million), $8.14 billion from businesses with revenue of not SBA completes processing all previously filed non-priority
more than $500,000 (the set-aside for this group was at applications and only if the RRF is not first exhausted.
least $5 billion), and $15.1 billion from businesses with
revenue of $500,001 to $1.5 million (the set-aside for this Legislation
group was at least an additional $4 billion). On April 7, 2022, the House passed H.R. 3807, the
Restaurant Revitalization Fund Replenishment Act of 2022.
Because the demand from applicants exceeded the RRF’s
The bill would provide $42 billion to replenish the RRF.
budgetary authority, the SBA closed the application portal Priority is to be provided to previous RRF applicants that
to most applicants. Applications were accepted until May did not receive an award. The bill also would provide $13
24 from applicants with revenue up to $50,000 because the
billion for a Hard Hit Industries Award Program for small
budget authority set aside for these applicants had not yet businesses with not more than 200 employees that suffered
been exhausted. revenue loss of at least 40% during the pandemic. These
Between May 3, 2021, and May 24, 2021, the SBA awards are to be made without regard to what industries
processed applications from priority groups and held they operate in, with grants capped at $1 million each. First
applications from non-priority applicants but retained their priority is to be provided to businesses that have
place in the processing queue based on the order in which experienced pandemic-related revenue loss of at least 80%.
the applications were filed. On May 25, 2021, the SBA Second priority is to be provided to businesses that have
began processing all non-priority applications with FY2019 experienced pandemic-related revenue loss of at least 60%.
gross revenue less than $50,000. On May 27, 2021, the
SBA began processing non-priority applicants on a first- On May 19, 2022, cloture on a motion to proceed to
come, first-served basis. consider S. 4008, the Small Business COVID Relief Act of
2022, was not invoked by a 52-43 vote in the Senate (60
As of May 26, 2021, the SBA had received more than votes were necessary). The bill would have provided $40
372,000 applications requesting over $76 billion in funds billion to replenish the RRF and $8 billion for specified
and had distributed about $16 billion to more than 63,000 types of small businesses, including fitness centers, minor
applicants. league sports teams, and live venue service providers.
On July 2, 2021, the SBA announced the RRF’s closure.
The RRF application portal remained open until July 14, Several other RRF-related bills of interest include H.R.
2021, to allow applicants to check their status, address 4568, H.R. 7407, S. 255, and S. 2091.
payment corrections, or ask questions. The SBA also
https://crsreports.congress.gov
SBA Restaurant Revitalization Fund Grants
Adam G. Levin, Analyst in Economic Development Policy
IF11819
Robert Jay Dilger, Senior Specialist in American National
Government
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https://crsreports.congress.gov | IF11819 · VERSION 12 · UPDATED
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