Updated July 6, 2021
SBA Restaurant Revitalization Fund Grants
The Small Business Administration’s (SBA’s) $28.6 billion
$500,000 and to distribute the remaining $23.6 billion in an
Restaurant Revitalization Fund Program (RRF) was
equitable manner to applicants of different sizes based on
authorized by P.L. 117-2, the American Rescue Plan Act of
annual gross receipts. To meet this latter directive, the SBA
2021. The RRF provided grants of up to $5 million per
set aside an additional $4 billion for applicants with 2019
permanent physical business location (not to exceed $10
gross receipts from $500,001 to $1.5 million and an
million per applicant and any affiliated businesses) to
additional $500 million for applicants with 2019 gross
restaurants and other similar places of business that had
receipts of not more than $50,000 “to ensure that the
experienced COVID-19-related revenue loss. Unlike most
smallest businesses and those in underserved communities
other SBA programs, there was no limit on the number of
receive funding.”
employees for businesses to qualify for a RRF grant.
The SBA also was required to provide priority to small
This Insight summarizes the statutory provisions enacted by
businesses owned and controlled by women, veterans, and
P.L. 117-2 and SBA-issued guidance on the RRF. For more
socially and economically disadvantaged individuals and to
information, see the SBA’s “Restaurant Revitalization
award grants only to these prioritized groups during the
Funding Program Guide.”
initial 21 days that the program was operational. The SBA
announced that during this period, it would accept
Eligibility Rules
applications from all eligible applicants but would
RRF grants were designed to assist applicants in remaining
distribute funds only to applicants that self-certified their
open or reopening. Permanently closed businesses were not
eligibility as a prioritized group. Thereafter, the SBA would
eligible, and temporarily closed businesses were required to
distribute grants in the order in which they were approved.
reopen soon, with eligible expenses incurred by March 11,
2021, at the latest.
An applicant’s grant award was equal to the amount of
COVID-19-related revenue loss (up to the program’s limits)
To qualify for the RRF, for-profit businesses (together with
the applicant experienced, as determined by formulas. In
their affiliated businesses) may not have owned or operated
the SBA’s RRF Program Guide, these formulas varied, in
more than 20 locations as of March 13, 2020, regardless of
part, based on the date an eligible entity began operations
whether those locations do business under the same or
(e.g., the date it started sales). Separate formulas
multiple names. P.L. 117-2 provided that, for the purposes
determined grant amounts for applicants that began
of the RRF, a business is affiliated with another if it has an
operations on or before January 1, 2019; partially through
equity or right to profit distributions of not less than 50% or
2019; on or between January 1, 2020, and March 10, 2021,
if an eligible entity has the contractual authority to control
or applicants that had not yet opened for sales but, as of
the direction of the business.
March 11, 2021, had incurred eligible expenses. The SBA’s
RRF Program Guide contains step-by-step calculation
Other entities not eligible for the RRF included state or
instructions.
local government-operated businesses, an entity that had
received or had a pending application for the SBA’s
For example, entities that began operations on or before
Shuttered Venue Operators Grant program, nonprofit
January 1, 2019, could receive the difference between their
organizations, and publicly traded companies. Certain
gross receipts as reported on 2019 and 2020 federal income
businesses that had filed for bankruptcy also were
tax returns, excluding any amounts received from a list of
ineligible.
specified sources (including the SBA’s PPP, Economic
Injury Disaster Loan [EIDL] Program, EIDL Advance
The SBA also required RRF applicants to certify that
Payment Program, Targeted EIDL Program, and debt relief
“current economic uncertainty [made] this funding request
payments). If the applicant received a PPP loan or EIDL,
necessary to support the ongoing or anticipated operations.”
those amounts were subtracted from the RRF 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
context, SBA requires that the borrower pass a “business
activity assessment” and a “liquidity assessment,” each of
business payroll costs (including sick leave);
which require detailed responses on SBA Form 3059.
business utility payments;
Grant Amounts
P.L. 117-2 required the SBA to set aside $5 billion for
business debt service (not including any prepayment of
applicants with 2019 gross receipts of not more than
principal or interest);
https://crsreports.congress.gov
SBA Restaurant Revitalization Fund Grants
business maintenance expenses;
Between May 3, 2021, and May 24, 2021, the SBA
processed applications from priority groups and held
outdoor seating construction;
applications from non-priority applicants but retained their
place in the processing queue based on the order in which
business supplies (including protective equipment and
the applications were filed. On May 25, 2021, the SBA
cleaning materials);
began processing all non-priority applications with FY2019
gross revenue less than $50,000. On May 27, 2021, the
business food and beverage expenses (including raw
SBA began processing non-priority applicants on a first-
materials);
come, first-served basis.
covered supplier costs; and
As of May 26, 2021, the SBA had received more than
372,000 applications requesting over $76 billion in funds
business operating expenses.
and had distributed about $16 billion to more than 63,000
applicants.
RRF funds must be used by March 11, 2023, on eligible
expenses incurred beginning February 15, 2020, and ending
On July 2, 2021, the SBA issued a press release announcing
March 11, 2023. Unused funds must be returned to the
the RRF’s closure. The RRF application portal will remain
SBA.
open until July 14, 2021, to allow applicants to check their
status, address payment corrections, or ask questions. The
RRF recipients are required to report their spending
SBA also announced that, as of June 30, 2021, it had
(whether complete or not) by December 31, 2021, and
received more than 278,000 eligible applications requesting
certify that the proceeds were used on eligible expenses.
over $72.2 billion in grants and had provided grants to
More information on this certification process likely will be
approximately 101,000 applicants. Underserved populations
detailed in future SBA regulations and guidance.
received approximately $18 billion of the $28.6 billion in
grant awards, including about $7 billion to women-owned
Applications Exceed $76 Billion
businesses, $6.7 billion to businesses owned by socially and
The SBA completed a seven-day pilot test period for the
economically disadvantaged individuals, $2.8 billion to
RRF application portal to identify and address any technical
businesses owned by representatives of multiple
issues prior to the portal’s opening, which took place at
underserved populations, and $1 billion to veteran-owned
noon on May 3, 2021. Participants in the pilot were
businesses.
randomly selected from existing PPP borrowers in priority
groups for the RRF. These participants did not receive RRF
Legal Challenges
funds until the application portal was opened to the public.
After the SBA launched the RRF, three lawsuits were filed
challenging the constitutionality of the RRF’s 21-day
RRF applications were submitted through a recognized
priority application period. Federal courts, including a
SBA Restaurant Partner (SBA-specified technology
three-judge panel of the U.S. Court of Appeals for the Sixth
companies that serve the restaurant industry) or directly on
Circuit, ruled against the SBA in each of these lawsuits.
the SBA website. Applicants needing assistance preparing
The courts held that the SBA’s prioritization of RRF funds
their applications were directed to contact their local SBA
on the basis of social disadvantage because of race and
district office or call the SBA’s call center support number
gender was unconstitutional under the Equal Protection
at 1-844-279-8898.
Clause. The court ordered the SBA to fund the plaintiffs’
grant applications, if approved, before all later-filed
On May 12, 2021, the SBA announced it had received more
applications, without regard to processing time or the
than 266,000 applications requesting over $65 billion in
applicants’ race or gender. The court decisions did not
funds, far greater than its $28.6 billion authorized amount.
affect the SBA’s prioritization for veteran-owned
Nearly half of the applications were submitted by women,
businesses in accordance with the law.
veterans, and socially and economically disadvantaged
business owners. The SBA received requests for $330
In response to these court rulings, the SBA sent letters to
million from businesses with not more than $50,000 in
2,965 priority RRF applicants who had been notified that
revenue (the set-aside for this group was at least $500
their applications had been approved but had not yet
million), $8.14 billion from businesses with revenue of not
received their grant funds, informing them that the agency
more than $500,000 (the set-aside for this group was at
“will not be able to disburse your Restaurant Revitalization
least $5 billion), and $15.1 billion from businesses with
Fund award.” Instead, those approvals will be paid only
revenue of $500,001 to $1.5 million (the set-aside for this
once the SBA completes processing all previously filed
group was at least an additional $4 billion).
non-priority applications and only if the RRF is not first
exhausted.
Because the demand from applicants exceeded the RRF’s
budgetary authority, the SBA closed the application portal
Legislation
to most applicants. Applications were accepted until May
Legislation has been introduced (H.R. 3807 and S. 2091) to
24 from applicants with revenue up to $50,000 because the
provide the RRF an additional $60 billion.
budget authority set aside for these applicants had not yet
been exhausted.
Robert Jay Dilger, Senior Specialist in American National
Government
https://crsreports.congress.gov
SBA Restaurant Revitalization Fund Grants
Sean Lowry, Analyst in Public Finance
IF11819
Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress.
Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has
been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the
United States Government, are not subject to copyright protection in the United States. Any CRS Report may be
reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include
copyrighted images or material from a third party, you may need to obtain the permissio n of the copyright holder if you
wish to copy or otherwise use copyrighted material.
https://crsreports.congress.gov | IF11819 · VERSION 8 · UPDATED