|Footnotes for this article are available at the end of this page.
On March 11, 2021, President Biden signed the American Rescue Plan of 2021. This legislation includes a Restaurant Revitalization Fund (“RRF”) for which Congress has allocated $28.6 billion in program grants for eligible entities. The amount of any grant is limited to the eligible entity’s “pandemic-related revenue loss” (defined below) and reduced by any amounts received (whether or not forgiven) from any Paycheck Protection Program loan. The aggregate amount of grants made to any eligible entity and its affiliates is capped at $10 million and $5 million per physical location of the entity.
For purposes of the RRF, the term “eligible entity” means a:
- Food stand, truck, or cart;
- Saloon, Inn, Tavern, Bar, Lounge or Brewpub;
- Tasting room or Taproom;
- Licensed facility or premise of a beverage alcohol producer where the public may taste, sample, or purchase products;
- Or other similar places of business in which the public or patrons assemble for the primary purpose of being served food or drink. This includes all such places described above, even if they are located in an airport terminal, or that is a Tribally-owned business.
An entity is “ineligible” for purposes of the RRF if it is:
- A State or local government-operated business;
- As of March 13, 2020, the entity owns or operates (together with any affiliated businesses1) more than 20 locations regardless of whether those locations do business under the same or multiple names; or
- Has a pending application or has received a grant under the Shuttered Venue Operators (“SVO”) Grant; or
- Is a publicly-traded company.
The RRF defines “pandemic-related revenue loss” as follows:
- The gross receipts, as established using verification as the U.S. Small Business Administration (“SBA”) may require, of the eligible entity during 2020 subtracted from the gross receipts of the eligible entity in 2019, if such sum is greater than zero;
- If the eligible entity was not in operation for all of 2019, the difference between the product obtained by multiplying the average monthly gross receipts of the eligible entity in 2019 by 12; and the product obtained by multiplying the average monthly gross receipts of the eligible entity in 2020 by 12; or an amount based on a formula determined by SBA.
- If the eligible entity opened during the period between January 1, 2020 and March 11, 2021, the authorized expenses incurred by the eligible entity minus any gross receipts received; or an amount based on a formula determined by SBA; or
- If the eligible entity has not yet opened as of the date of application for a grant but has incurred authorized expenses as of March 11, 2021, the amount of those expenses; or an amount based on a formula determined by SBA.
The grants can be used for the following authorized expenses:
- Payroll costs
- Principal and interest payments on a mortgage (but not a prepayment of principal on a mortgage obligation)
- Rent, including rent under a lease agreement (but not prepayment of rent)
- Maintenance expenses, including construction and furnishing costs for outdoor seating, walls floors, deck surfaces, furniture, fixtures, and equipment
- Supplies, including protective equipment and cleaning materials
- Food and beverage expenses that are within the normal scope of business of the eligible entity prior to February 15, 2020
- Covered supplier costs
- Operational expenses
- Paid sick leave
- Anything else determined by the SBA to be essential to maintaining the eligible entity
Grant funds must be returned in the event that:
- The entity’s pandemic-related revenue losses are estimated in its grant application, and the estimate overstates the losses; or
- The entity goes out of business before using all of the grant funds; or
- The entity fails to use all of the grant funds before December 31, 2021, or a date set by the SBA, which cannot be more than two years after the date the Act is enacted.
During the initial 21-day period in which SBA awards grants, SBA must prioritize grants to women-owned, veteran-owned, or socially and economically disadvantaged small businesses.
Entities seeking grants must self-certify in good faith in their applications that:
- The uncertainty of the current economic conditions makes necessary the grant request to support ongoing operations of the eligible entity;
- The eligible entity has not applied for or received an SVO Grant; and
- To the extent of seeking priority for the application as described above, that the eligible entity is eligible for priority.
Although not expressly stated in the American Rescue Plan nor in SBA guidance (which will likely not be issued until April of 2021), it is widely believed that SBA will administer this program in a manner similar to its administration of the SVO Grant, which requires an applicant to obtain a Data Universal Numbering System (“DUNS”) number and register in the U.S. General Services Administration’s System for Award Management (referred to as “SAM”). AGG attorneys have been assisting its clients in obtaining DUNS numbers and registering in SAM for nearly a decade.
AGG will provide updates on the RRF as soon as SBA issues any guidance, interim final rules, and/or frequently asked questions about the program.
 An “affiliated business” means a business in which an eligible entity has an equity or right to profit distributions of not less than 50 percent, or in which an eligible entity has the contractual authority to control the direction of the business, provided that such affiliation shall be determined as of any arrangements or agreements in existence as of March 13, 2020.