BY FREDA MIKLIN GOVERNMENTAL REPORTER
The $28.6 billion Restaurant Revitalization Fund (RRF), part of the American Rescue Plan, is being rolled out by the U.S. Small Business Administration (SBA) during the last weeks of April (they haven’t set a specific date). In its first 21 days of operation, funding priority will be given to businesses owned at least 51% by women, veterans, and socially and economically challenged individuals. During that period, all other eligible grant recipients can complete and submit their applications for available funding that will be awarded on a first-come, first-served basis beginning on the 22nd day after the program opens. In a webinar hosted by U.S. Rep. Jason Crow on April 20, Frances Padilla, director of the Colorado District Office of the SBA provided details about the program.
The purpose of the RRF is to help restaurants, bars, and other retail establishments that serve food and drinks to customers, described by the SBA as “irreplaceable gathering places in our neighborhoods and communities that need a lifeline now to get back on their feet…to make sure these businesses can meet payroll, purchase supplies, and get what they need in place to transition to today’s COVID-restricted marketplace.”
The SBA may provide funding up to $5 million per location, not to exceed $10 million total for the applicant and any affiliated business. The minimum award is $1,000. The amount a business is eligible to receive will be its 2019 gross receipts minus its 2020 gross receipts. PPP loans already received will be deducted from that remainder. If a business began (based on the day it started making sales to the public) after January 1, 2019, its 2019 receipts will be determined by annualizing its sales during that year. If a business started making sales after January 1, 2020, it can apply to be reimbursed for its eligible expenses in 2020 minus any PPP loans received. Gross receipts do not include PPP loans, EIDL loans or grants, or state or local business grants received.
Businesses eligible for these grants, which do not need to be repaid as long as they are used for eligible expenses, include restaurants, bars, food trucks, food carts, food stands, caterers, saloons, lounges, taverns, bakeries, brewpubs, taprooms, microbreweries, tasting rooms, coffee shops, ice cream shops, snack bars, beverage bars, wineries, distilleries, inns, and other licensed facilities or premises of a beverage alcohol producer where the public may taste, sample or purchase products, along with other similar places of business in which the public or patrons assemble for the primary purpose of being served food or drink. Establishments inside airport terminals, hotels, and conference centers are included in the program. To be eligible, a business must have greater than 33 percent onsite sales of food or drink in 2019. The SBA may ask for business records to substantiate the 33 percent minimum.
Eligible business expenses for which this grant money can be used include those incurred between February 15, 2020 and March 31, 2023 (yes, 2023) for payroll including sick leave, utilities, maintenance, supplies including protective equipment and cleaning materials, food and beverages including raw materials, operating expenses including insurance, marketing, fees, licenses, legal, point of sale equipment, construction of outdoor seating, regular mortgage and rent payments, and regular debt service on business loans. Expansion costs are ineligible.
Business owners organized as sole proprietorships, partnerships, and corporations are all eligible unless they are publicly traded, a nonprofit, own more than 20 locations, or are permanently closed. Franchised businesses of franchises that are listed in the SBA Franchise Directory are eligible. Businesses that are in Chapter 11, 12, or 13 Bankruptcy and are already under an approved plan for reorganization are eligible as long as they meet all other program requirements.
The legal definition of socially disadvantaged individuals for purposes of the RRF is “Black Americans; Hispanic Americans; Native Americans (including Alaska Natives and Native Hawaiians); Asian Pacific Americans; or Subcontinent Asian Americans.” The applicable law, describes economically disadvantage individuals as “those socially disadvantaged individuals whose ability to compete in the free enterprise system has been impaired due to diminished capital and credit opportunities as compared to others in the same business area who are not socially disadvantaged.”
The RRF co-coordinator for Colorado is David Benavides, whose email is firstname.lastname@example.org. Businesses who receive RRF grants must report annually to the SBA on how the funds have been used. The SBA can may request supporting documentation to verify those reports.
Applications for the RRF programs are available at restaurants.sba.gov, through a participating point-of-sale vendor that is partnering with SBA (Square, Toast), through SBA Resource Partners, including Mi Casa WBC, Denver SCORE, and Colorado Springs SCORE, or by calling the program hotline at 1-844-279-8898, which will be active when the program opens.