Restaurant Revitalization Fund Grant Program | Winthrop & Weinstine, Pennsylvania
Congress authorized a promising grant program for restaurants, bars, breweries, food trucks and caterers, with grants awarded based on the recipient’s income decline in 2020. The Grant from the Restaurant Revitalization Fund program is part of American Rescue Plan Act of 2021, which was enacted on March 11, 2021. Read on for a summary of the grants allowed by this legislation as it was signed; we expect changes to be made to the terms of the program as regulations or guidelines emerge.
Grants for restaurant revitalization
What is that? A $ 28.6 billion program providing cash grants to restaurants (including bars, breweries, caterers and food trucks) that saw their income decline in 2020.
How much can I receive? The cash grants will be equal to the amount of the decrease in the gross receipts of the beneficiary in 2020 compared to 2019, less the amount of any PPP loans received by the restaurant. The grant is capped at $ 10 million for each recipient, or $ 5 million per restaurant.
Who qualifies? A “qualifying entity” is any business in which the public assembles for the service of food and drink, including restaurants, food trucks, food carts, caterers, bars and breweries. Gross revenue for 2020 must be lower than for 2019 for a grant to be generated. Restaurants are not eligible if they (i) had more than 20 restaurants (grouped with affiliates) as of March 10, 2020, or (ii) are publicly traded. Grant recipients will need to certify in good faith that uncertain current economic conditions make the grant application necessary to support the ongoing operations of the eligible entity (you may recognize this certification requirement in PPP applications).
How can I get the funds? The Treasury Department will allocate funds to the Small Business Administration (SBA) to administer the program. Although details are not yet fully available, this program appears to be intended directly for the beneficiary, similar to the EIDL Advance program (with applications accepted through an online portal from the SBA site), rather than an administered program. by a bank like the PPP.
How can I spend the funds? The grant can be spent on essentially any operating expenses that were incurred as a result of or during the COVID-19 pandemic. Specific categories include labor costs (definition borrowed from PPP), rent or mortgage payments, utilities, maintenance, supplies, food and drink costs, some supplier costs, and others. operational costs. Grant funds must be spent by December 31, 2021 or returned.
How will it be taxed? Not only is the grant excluded from gross income, but the business will be able to deduct expenses paid with grant funds from its gross income.