SBA Restaurant Revitalization Fund Grants (IF11819, Version 1)
Summary
This Congressional Research Service Insight, IF11819 Version 1, dated April 28, 2021, summarizes the $28.6 billion Restaurant Revitalization Fund created by P.L. 117-2, the American Rescue Plan Act of 2021. Grants run up to $5 million per location and equal COVID-19 revenue loss, minus any PPP or EIDL amounts received. The law sets aside $5 billion for applicants with 2019 gross receipts of not more than $500,000; the SBA adds $4 billion for $500,001 to $1.5 million and $500 million for $50,000 or less. Businesses owned by women, veterans and socially and economically disadvantaged individuals get the first 21 days. Applicants may not have operated more than 20 locations as of March 13, 2020, and funds must be used by March 11, 2023.
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April 28, 2021
SBA Restaurant Revitalization Fund Grants
The Small Business Administration’s (SBA’s) $28.6 billion context, SBA requires that the borrower pass a “business
Restaurant Revitalization Fund Program (RRF) was activity assessment” and a “liquidity assessment,” each of
authorized by P.L. 117-2, the American Rescue Plan Act of which require detailed responses on SBA Form 3059.
2021. The RRF provides grants of up to $5 million per
permanent physical business location (not to exceed $10 Grant Amounts
million per applicant and any affiliated businesses) to P.L. 117-2 requires the SBA to set aside $5 billion for
restaurants and other similar places of business “in which applicants with 2019 gross receipts of not more than
the public or patrons assemble for the primary purpose of $500,000 and to distribute the remaining $23.6 billion in an
being served food or drink” and which have experienced equitable manner to applicants of different sizes based on
COVID-19-related revenue loss. Unlike most other SBA annual gross receipts. To meet this latter directive, the SBA
programs, there is no limit on the number of employees for is setting aside an additional $4 billion for applicants with
businesses to qualify for a RRF grant. 2019 gross receipts from $500,001 to $1.5 million and an
additional $500 million for applicants with 2019 gross
This Insight summarizes the statutory provisions enacted by receipts of not more than $50,000 “to ensure that the
P.L. 117-2 and SBA-issued guidance on the RRF. For more smallest businesses and those in underserved communities
information, see the SBA’s “Restaurant Revitalization receive funding.”
Funding Program Guide.”
The SBA is also required to provide priority to small
Eligibility Rules businesses owned and controlled by women, veterans, and
RRF grants are designed to assist applicants in remaining socially and economically disadvantaged individuals and
open or reopening. Permanently closed businesses are not may award grants only to these prioritized groups during
eligible and temporarily closed businesses must reopen the initial 21 days that the program is operational. The SBA
soon, with eligible expenses incurred by March 11, 2021, at has announced that during this time period, it will accept
the latest. applications from all eligible applicants, but will distribute
funds only to applicants that self-certify their eligibility as a
To qualify for the RRF, for-profit businesses (together with prioritized group. Thereafter, grants will be distributed in
their affiliated businesses) may not have owned or operated the order in which they are approved by the SBA.
more than 20 locations as of March 13, 2020, regardless of
whether those locations do business under the same or An applicant’s grant award is equal to the amount of
multiple names. P.L. 117-2 provides that, for the purposes COVID-19-related revenue loss (up to the program’s limits)
of the RRF, a business is affiliated with another if it has an the applicant experienced, as determined by formulas. In
equity or right to profit distributions of not less than 50% or the SBA’s RRF Program Guide, these formulas vary, in
if an eligible entity has the contractual authority to control part, based on the date an eligible entity began operations
the direction of the business. (e.g., the date the entity started sales). Separate formulas
determine grant amounts for applicants that began
Other entities not eligible for the RRF include state or local operations on or before January 1, 2019; partially through
government-operated businesses, an entity that has received 2019; on or between January 1, 2020, and March 10, 2021;
or has a pending application for the SBA’s Shuttered Venue or have not yet opened for sales but, as of March 11, 2021,
Operators Grant program, nonprofit organizations, and have incurred eligible expenses. The SBA’s RRF Program
publicly traded companies. Certain businesses that have Guide contains step-by-step calculation instructions.
filed for bankruptcy are also ineligible.
For example, entities that began operations on or before
Although further SBA guidance could be necessary, it January 1, 2019, may receive the difference between their
would appear that franchises could be eligible for the RRF gross receipts as reported on their 2019 and 2020 federal
as long as they meet the affiliated business limit of 20 income tax returns, excluding any amounts received from a
locations and the franchises, themselves, are not publicly list of specified sources (this includes the SBA’s PPP,
traded. Economic Injury Disaster Loan (EIDL) Program, EIDL
Advance Payment Program, Targeted EIDL Program, and
The SBA also requires that a RRF applicant certify that, debt relief payments). If the applicant received a PPP loan
“current economic uncertainty makes this funding request or EIDL, those amounts will be subtracted from the RRF
necessary to support the ongoing or anticipated operations.” grant amount.
This certification, which was first required on applications
for SBA’s Paycheck Protection Program (PPP) loans, has Eligible Expenses
been subject to evolving agency guidance. In the PPP Grant proceeds may be used for
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SBA Restaurant Revitalization Fund Grants
business payroll costs (including sick leave); RRF recipients are required to report their spending
(whether complete or not) by December 31, 2021, and
business mortgage obligation payments or rent certify that the proceeds have been used on eligible
payments (not including prepayment of mortgage expenses. More information on this certification process
principal or rent); will likely be detailed in future SBA regulations and
guidance.
business debt service (not including any prepayment of
principal or interest); Application Dates
The SBA is currently conducting a 7-day pilot test period
business utility payments; for the RRF application portal and will address any
technical issues that may arise prior to opening the portal,
business maintenance expenses; currently scheduled for noon on May 3, 2021. Participants
in the pilot were randomly selected from existing PPP
outdoor seating construction; borrowers in priority groups for the RRF. These
participants will not receive RRF funds until the application
business supplies (including protective equipment and portal is open to the public.
cleaning materials);
Once opened, RRF applications may be submitted through
business food and beverage expenses (including raw a recognized SBA Restaurant Partner (SBA-specified
materials); technology companies that serve the restaurant industry) or
directly on the SBA website. Applicants needing assistance
covered supplier costs; and preparing their applications may contact their local SBA
district office or call the SBA’s call center support number
business operating expenses. at 1-844-279-8898.
RRF funds must be used by March 11, 2023, on eligible Robert Jay Dilger, Senior Specialist in American National
expenses incurred beginning on February 15, 2020, and Government
ending on March 11, 2023. Any unused funds must be Sean Lowry, Analyst in Public Finance
returned to the SBA.
IF11819
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SBA Restaurant Revitalization Fund Grants
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