Outdoor restaurant with tables set up waiting for customers to arrive. The Restaurant Revitalization Fund will offer $28.6 billion in grants to hard-hit restaurants and bars, with restaurants able to apply for grants based on lost revenue. — Getty Images/Volodymyr Rozumii

This story was updated on 3/31/21 to reflect a change in SBA requirements for the Restaurant Revitalization Fund (RRF). Restaurants will not be required to acquire a System of Award Management (SAM) number.

One of the hardest-hit industries during the COVID-19 pandemic has been restaurants, with shutdowns and restrictions cutting off revenue opportunities. The newly passed American Rescue Plan Act (ARPA) aims to help restaurants, bars and related businesses with a new grant program called the Restaurant Revitalization Fund (RRF).

“By our estimates, we've lost $250 billion in revenue from the beginning of the pandemic,” National Restaurant Association Executive Vice President Sean Kennedy said at CO—’s recent Small Business Update event. “From March until January of this year, 110,000 restaurants have been closed. … Our goal has always been an industry-specific solution, and the announcement of the passage of the Restaurant Revitalization Fund is a big step towards that.”

The RRF will offer $28.6 billion in grants to hard-hit restaurants and bars, with restaurants able to apply for grants based on lost revenue. Additionally, $5 billion of that total will be set aside expressly for businesses with 2019 gross receipts of less than $500,000.

Here are five big things restaurants need to know about the RRF grants.

[Visit our full Restaurant Business Strategy Guide for all of our restaurant coverage.]

Who is eligible for RRF grants?

Most American restaurants and bars that lost revenue in 2020 versus 2019 will be eligible to apply for RRF grants. The ARPA explicitly names the following types of establishments that should be eligible: “restaurant, food stand, food truck, food cart, caterer, saloon, inn, tavern, bar, lounge, brewpub, tasting room, taproom, licensed facility or premise of a beverage alcohol producer where the public may taste, sample, or purchase products.”

However, any restaurant or bar that is part of a publicly-traded company or owned by a state or local government is not eligible to apply. Also, owners that operate more than 20 restaurants are ineligible. Notably, if you are the owner of a franchise and you do not control more than 20 locations, you are likely eligible to apply.

How and when can I apply?

The Small Business Administration (SBA) will administer and disperse the RRF grants, but the program does not yet have an official launch date as of mid-March 2021. Those interested in obtaining RRF grants should keep a close eye on the SBA’s COVID-19 relief options web portal.

The U.S. Chamber's Neil Bradley and National Restaurant Association's Sean Kennedy break down the new restaurant relief program.

Our goal has always been an industry-specific solution, and the announcement of the passage of the Restaurant Revitalization Fund is a big step towards that.

Sean Kennedy, EVP, National Restaurant Association

How much can I get from the grant program?

Generally speaking, restaurants can apply for grants that are equal to 2020 gross revenue minus 2019 gross revenue. For businesses in operation for all of 2019 and 2020, the maximum grant size will be $5 million for restaurants and $10 million for restaurant groups. Grant funds will not be taxed like income.

If a restaurant was not operating for all of 2019, the maximum grant value is the average monthly gross receipts in 2020 minus the average monthly gross receipts in 2019. If a restaurant was not in operation for all of 2020, it could potentially receive a grant that totals the amount of “eligible expenses” put into the business to date.

The SBA will release more information later to clarify the amount restaurants established after January 2019 can apply for and how it may adjust grant amounts based on “relative local costs.”

[Visit our full Restaurant Business Strategy Guide for all of our restaurant coverage.]

What can grant funds be used for?

The RRF grants are only able to be used on specific expenses. These include:

  • Payroll costs.
  • Payments of principal or interest on any mortgage obligation.
  • Rent payments, including rent under a lease agreement.
  • Utilities.
  • Maintenance, including new outdoor seating construction.
  • Supplies, including PPE and cleaning materials.
  • Food and beverage inventory.
  • Covered supplier costs.
  • Operational expenses.
  • Paid sick leave.
  • Any other expense SBA says is essential to maintain operations.

The “covered period” for what expenses can be paid by the grant must be incurred between February 15, 2020, to December. 31, 2021.

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

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Published March 24, 2021