American Rescue Plan: Stimulus Help for Restaurants and Bars

Updated May 2, 2021:  American Rescue Plan: Stimulus Help for Restaurants and Bars

The application portal is now live:

https://www.sba.gov/funding-programs/loans/covid-19-relief-options/restaurant-revitalization-fund

The hospitality industry has been hit particularly hard by the COVID-19 pandemic, including restaurants and bars that have undergone continually changing regulations and restrictions.

Help is on the way with the latest federal stimulus package.

When the American Rescue Plan Act (ARPA) was signed into law by President Biden on March 11, 2021, it included $28.6 billion to create a Restaurant Revitalization Fund that will be administered by the Small Business Administration (SBA).

Who’s Eligible
Eligible entities include restaurants, food stands, food trucks, food carts, caterers, saloons, inns, taverns, bars, lounges, brewpubs, tasting rooms, taprooms and licensed facilities or premises of a beverage producer where the public may taste, sample or purchase products, or other similar places of business in which the public gathers for the primary purpose of being served food and drink.

Publicly traded companies are not eligible, and neither are state or local government-operated businesses and entities that operate more than 20 locations as of March 13, 2020.

Eligibility Related to Other Stimulus Money
Entities that have a pending application for or have received a Shuttered Venue Operators Grant (SVOG) under the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act are not able to apply for funds under the Restaurant Revitalization Fund.

Groups that have received Paycheck Protection Program (PPP) loans are eligible for this latest round of stimulus, but pandemic-related revenue losses must be reduced by any amounts received through first draw and second draw PPP loans in 2020 and 2021.

Restaurant Revitalization Grants can be used along with Employee Retention Tax Credits (ERTC), with the caveat that the grant money and ERTC cannot be used for the same expenses.

Grant Amounts and Priority
Grants will be equal to an entity’s pandemic-related revenue loss with a maximum grant of $10 million and affiliated businesses capped at $5 million per physical location. $5 billion has been allocated specifically for entities with 2019 gross receipts of $500,000 or less.

When the SBA begins accepting applications, there will be a 21-day priority period for entities that are owned and controlled by women, veterans, or socially and economically disadvantaged small business concerns.

Allowable Expenses
Eligible expenses are those that were incurred from February 15, 2020 to December 31, 2021. If all grant funds are not spent, or if the business permanently closes before the end of the covered period, the grant money must be returned to the U.S. Treasury.

Funds may be spent on payroll; principal or interest on mortgage obligations; rent including rent under lease agreements; utilities; maintenance expenses including construction to accommodate outdoor seating; supplies including protective equipment; normal food and beverage inventory; covered supplier costs; operational expenses; paid sick leave; and any other expenses that the SBA determines are essential to maintaining operations.

How to Apply
It’s expected that the SBA will develop a new webpage and application portal to administer Restaurant Revitalization Funds, but no timeline is currently available. Until the portal opens, businesses should begin preparing application materials including calculating the amount of their grant eligibility.

Additional Relief for Pennsylvania Entities
While the federal Restaurant Revitalization Fund portal is not yet open, Pennsylvania’s new grant program for restaurants and other hospitality businesses has been taking grant applications since March 15. The $145 million program is known as the Covid-19 Hospitality Industry Recovery Program (CHIRP) and businesses can apply for grants up to $50,000.

Eligibility requirements include being a for-profit business with fewer that 300 employees and a net worth under $15 million. Business operations must have started before February 15, 2020 and an applying business must declare that it does not intend to permanently close within one year of applying for the grant.

There is no central Pennsylvania portal for these grant applications. Instead, each Pennsylvania county is administering the grants at the county level and businesses can apply based on the location of their main operating location.

Summary
Details of the Restaurant Revitalization Fund will likely continue to emerge once the SBA application portal is open. Continue to check www.herbein.com for updated information or reach out to your Herbein advisor.

For additional information contact us at info@herbein.com.

Article contributed by Regina O'Keefe.