Updated May 13, 2021
SBA Restaurant Revitalization Fund Grants
The Small Business Administration’s (SBA’s) $28.6 billion
context, SBA requires that the borrower pass a “business
Restaurant Revitalization Fund Program (RRF) was
activity assessment” and a “liquidity assessment,” each of
authorized by P.L. 117-2, the American Rescue Plan Act of
which require detailed responses on SBA Form 3059.
2021. The RRF provides grants of up to $5 million per
permanent physical business location (not to exceed $10
Grant Amounts
million per applicant and any affiliated businesses) to
P.L. 117-2 requires the SBA to set aside $5 billion for
restaurants and other similar places of business “in which
applicants with 2019 gross receipts of not more than
the public or patrons assemble for the primary purpose of
$500,000 and to distribute the remaining $23.6 billion in an
being served food or drink” and which have experienced
equitable manner to applicants of different sizes based on
COVID-19-related revenue loss. Unlike most other SBA
annual gross receipts. To meet this latter directive, the SBA
programs, there is no limit on the number of employees for
is setting aside an additional $4 billion for applicants with
businesses to qualify for a RRF grant.
2019 gross receipts from $500,001 to $1.5 million and an
additional $500 million for applicants with 2019 gross
This Insight summarizes the statutory provisions enacted by
receipts of not more than $50,000 “to ensure that the
P.L. 117-2 and SBA-issued guidance on the RRF. For more
smallest businesses and those in underserved communities
information, see the SBA’s “Restaurant Revitalization
receive funding.”
Funding Program Guide.”
The SBA is also required to provide priority to small
Eligibility Rules
businesses owned and controlled by women, veterans, and
RRF grants are designed to assist applicants in remaining
socially and economically disadvantaged individuals and
open or reopening. Permanently closed businesses are not
may award grants only to these prioritized groups during
eligible and temporarily closed businesses must reopen
the initial 21 days that the program is operational. The SBA
soon, with eligible expenses incurred by March 11, 2021, at
has announced that during this time period, it will accept
the latest.
applications from all eligible applicants, but will distribute
funds only to applicants that self-certify their eligibility as a
To qualify for the RRF, for-profit businesses (together with
prioritized group. Thereafter, grants will be distributed in
their affiliated businesses) may not have owned or operated
the order in which they are approved by the SBA.
more than 20 locations as of March 13, 2020, regardless of
whether those locations do business under the same or
An applicant’s grant award is equal to the amount of
multiple names. P.L. 117-2 provides that, for the purposes
COVID-19-related revenue loss (up to the program’s limits)
of the RRF, a business is affiliated with another if it has an
the applicant experienced, as determined by formulas. In
equity or right to profit distributions of not less than 50% or
the SBA’s RRF Program Guide, these formulas vary, in
if an eligible entity has the contractual authority to control
part, based on the date an eligible entity began operations
the direction of the business.
(e.g., the date the entity started sales). Separate formulas
determine grant amounts for applicants that began
Other entities not eligible for the RRF include state or local
operations on or before January 1, 2019; partially through
government-operated businesses, an entity that has received
2019; on or between January 1, 2020, and March 10, 2021;
or has a pending application for the SBA’s Shuttered Venue
or have not yet opened for sales but, as of March 11, 2021,
Operators Grant program, nonprofit organizations, and
have incurred eligible expenses. The SBA’s RRF Program
publicly traded companies. Certain businesses that have
Guide contains step-by-step calculation instructions.
filed for bankruptcy are also ineligible.
For example, entities that began operations on or before
Although further SBA guidance could be necessary, it
January 1, 2019, may receive the difference between their
would appear that franchises could be eligible for the RRF
gross receipts as reported on their 2019 and 2020 federal
as long as they meet the affiliated business limit of 20
income tax returns, excluding any amounts received from a
locations and the franchises, themselves, are not publicly
list of specified sources (this includes the SBA’s PPP,
traded.
Economic Injury Disaster Loan (EIDL) Program, EIDL
Advance Payment Program, Targeted EIDL Program, and
The SBA also requires that a RRF applicant certify that,
debt relief payments). If the applicant received a PPP loan
“current economic uncertainty makes this funding request
or EIDL, those amounts will be subtracted from the RRF
necessary to support the ongoing or anticipated operations.”
grant amount.
This certification, which was first required on applications
for SBA’s Paycheck Protection Program (PPP) loans, has
Eligible Expenses
been subject to evolving agency guidance. In the PPP
Grant proceeds may be used for
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SBA Restaurant Revitalization Fund Grants
business payroll costs (including sick leave);
randomly selected from existing PPP borrowers in priority
groups for the RRF. These participants did not receive RRF
business mortgage obligation payments or rent
funds until the application portal was opened to the public.
payments (not including prepayment of mortgage
principal or rent);
RRF applications may be submitted through a recognized
SBA Restaurant Partner (SBA-specified technology
business debt service (not including any prepayment of
companies that serve the restaurant industry) or directly on
principal or interest);
the SBA website. Applicants needing assistance preparing
their applications may contact their local SBA district office
business utility payments;
or call the SBA’s call center support number at 1-844-279-
8898.
business maintenance expenses;
On May 12, 2021, the SBA announced that it had received
outdoor seating construction;
more than 266,000 applications requesting over $65 billion
in funds, far greater than its $28.6 billion authorized
business supplies (including protective equipment and
amount. Nearly half of the applications were submitted by
cleaning materials);
women, veterans, and socially and economically
disadvantaged business owners. The SBA received requests
business food and beverage expenses (including raw
for $330 million from businesses with not more than
materials);
$50,000 in revenue (the set-aside for this group is at least
$500 million), $8.14 billion from businesses with revenue
covered supplier costs; and
of not more than $500,000 (the set-aside for this group is at
least $5 billion), and $15.1 billion from businesses with
business operating expenses.
revenue of $500,001 to $1.5 million (the set-aside for this
group is at least an additional $4 billion). Because the
RRF funds must be used by March 11, 2023, on eligible
demand from applicants exceeds the RRF’s budgetary
expenses incurred beginning on February 15, 2020, and
authority, the SBA has closed the application portal to most
ending on March 11, 2023. Any unused funds must be
applicants. Applications are still being accepted from
returned to the SBA.
applicants with revenue up to $50,000 because the budget
authority set aside for these applicants has not yet been
RRF recipients are required to report their spending
exhausted.
(whether complete or not) by December 31, 2021, and
certify that the proceeds have been used on eligible
As of May 12, 2021, the SBA had distributed $2.7 billion in
expenses. More information on this certification process
RFF funds to more than 21,000 applicants.
will likely be detailed in future SBA regulations and
guidance.
Robert Jay Dilger, Senior Specialist in American National
Applications Exceed $65 Billion
Government
Sean Lowry, Analyst in Public Finance
The SBA completed a 7-day pilot test period for the RRF
application portal to identify and address any technical
IF11819
issues prior to the portal’s opening, which took place at
noon on May 3, 2021. Participants in the pilot were
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SBA Restaurant Revitalization Fund Grants
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https://crsreports.congress.gov | IF11819 · VERSION 2 · UPDATED