April 8, 2021

How The Restaurant Revitalization Fund Could Benefit Your Business

Restaurants and bars have undoubtedly suffered greatly as a result of the economic impact of the COVID-19 pandemic, and many have had to reduce their staff or close their doors permanently. However, for eligible restaurants and related businesses, there may be some relief on the way with a new grant program, the Restaurant Revitalization Fund.

Part of the recently passed America Rescue Plan Act and within the Small Business Administration, the Restaurant Revitalization Fund is a $28.6 billion effort to assist hurting and struggling restaurants across the country. The fund states that an eligible business can receive a tax-free federal grant that equals the total of its pandemic-related revenue losses.

To learn more about the Restaurant Revitalization Fund and how it could provide relief to your restaurant or business, read on below.

Establishments that qualify

Restaurants, bars, food trucks, food carts, food stands, catering businesses, and any licensed facility where customers gather for food and drink or can taste, sample, or purchase products are eligible. The entity must own or operate no more than 20 establishments, and publicly traded establishments do not qualify.

Eligible expenses and benefits

In order for expenses to be eligible, you must state your business will spend the funds on certain needs. These can include principal or interest on mortgage responsibilities, rent, payroll and staffing, utilities, maintenance, and construction related to pandemic accommodations like outdoor seating. They can also include supplies such as inventory, paid sick leave, operation expenses, protective equipment, and cleaning materials.

If your business is deemed eligible, it could receive up to $10 million and $5 million per physical location if you have multiple establishments. Not only would the funds help keep your operations running smoothly, but they could also significantly assist in keeping staff on payroll and your customers happy and safe.

Calculating losses to apply

To calculate your losses to apply for the grant, subtract your 2020 gross receipts from your 2019 gross receipts. If your business received support from Paycheck Protection Program (PPP) First Draw and Second Draw loans in 2020 and/or 2021, it’s important to note that your pandemic-related revenue losses are reduced by those amounts when applying for the grant.

Tax information

In order to receive the grant, your business is required to submit a good faith certification that the current uncertain state of the economy makes the grant necessary to support operations. You also must confirm that your business has not applied for or received a “Shuttered Venue Operators” grant, which is typically given to establishments like theaters and live venues. Normal federal tax deductions apply and grants are not taxed as income.

At Roach, Lennon & Brown, we provide guidance to restaurants, bars, breweries, and businesses in the food industry in regard to what they need to operate within the law, maximize their opportunities, and protect their assets. If you have questions regarding if your business qualifies for the Restaurant Revitalization Fund or how to apply, please contact our team today.