Editorial · July 8, 2021
Restaurant Revitalization Fund: what it covered and who got it
The Restaurant Revitalization Fund was a one time federal grant program for restaurants, bars and similar food and drink businesses hit by the pandemic. Congress set aside $28.6 billion, and the U.S. Small Business Administration (SBA) ran it. It is now closed to new applications. Here is what it covered and how awards were sized.
Where the money came from
Congress created the fund in the American Rescue Plan Act, which became law on March 11, 2021. The law gave the SBA $28.6 billion to pay grants. A grant is not a loan. A business that used the money for eligible costs did not have to pay it back.
The law also set aside shares of the money for the smallest businesses. At least $5 billion was reserved for applicants with 2019 receipts of $500,000 or less. The SBA opened the application portal on May 3, 2021.
Who could apply
Eligible businesses included restaurants, food stands, food trucks, food carts, caterers, bars, taverns, lounges, brewpubs, tasting rooms and similar places where people gather to be served food or drink. A business could own or run no more than 20 locations. Government run places and publicly traded companies were not eligible. Applicants also had to show a loss of revenue tied to the pandemic.
The law lets the grant pay for many ordinary costs. These include payroll, rent and mortgage interest, utilities, supplies, food and drink costs, and outdoor seating.
How awards were sized
The size of a grant followed the revenue a business lost. For a business that was open all of 2019, the SBA took its 2019 gross receipts and subtracted its 2020 gross receipts. Money from the Paycheck Protection Program (PPP) was then taken out of that gap. So a business that had already received PPP help got a smaller award.
There were two caps. A business could get up to $5 million for each physical location, and no more than $10 million in total. The average award was about $283,000, and most awards fell between $150,000 and $5 million.
The 21 day priority window
The law told the SBA to put some applicants first. For the first 21 days of awards, the SBA had to give priority to businesses owned and controlled by women, veterans, and socially and economically disadvantaged people. Owners certified their status on the application.
Demand was heavy from the start. Priority businesses sent in about 147,000 applications asking for about $29 billion in the program's opening days.
Court cases then changed how the priority worked. Business owners sued, saying the priority treated them unfairly, and several federal judges sided with them. The SBA stopped handling some priority applications while the cases went on.
Where the fund stands now
The money ran out. On June 30, 2021, the SBA reported more than 278,000 applications asking for over $72 billion. That is far more than the $28.6 billion on offer. The SBA wrote to applicants that it had been able to fund about 105,000 restaurants and other businesses before the fund was used up.
The agency said it would turn off the application portal on July 14, 2021. Until then, applicants can still check their status and fix payment details. Awarded businesses must use the money on eligible costs and report how they spent it.
What owners can do next
Owners who got a grant should keep records of every cost paid with it. Owners who were not funded should read the SBA's notice and check the SBA site for updates. Other help for restaurants, such as PPP and disaster loans, runs under separate rules and deadlines, so check each one on its own.