Updated April 11, 2022
SBA Restaurant Revitalization Fund Grants
The Small Business Administration’s (SBA’s) $28.6 billion
smallest businesses and those in underserved communities
Restaurant Revitalization Fund Program (RRF) was
receive funding.”
authorized by P.L. 117-2, the American Rescue Plan Act of
2021. The RRF provided grants of up to $5 million per
The SBA also was required to provide priority to small
permanent physical business location (not to exceed $10
businesses owned and controlled by women, veterans, and
million per applicant and any affiliated businesses) to
socially and economically disadvantaged individuals and to
restaurants and other similar places of business that had
award grants only to these prioritized groups during the
experienced COVID-19-related revenue loss. Unlike most
initial 21 days that the program was operational. The SBA
other SBA programs, there was no limit on the number of
announced that during this period, it would accept
employees for businesses to qualify for a RRF grant.
applications from all eligible applicants but would
distribute funds only to applicants that self-certified their
This Insight summarizes the statutory provisions enacted by
eligibility as a prioritized group. Thereafter, the SBA would
P.L. 117-2 and SBA-issued guidance on the RRF. For more
distribute grants in the order in which they were approved.
information, see the SBA’s “Restaurant Revitalization
Funding Program Guide.”
An applicant’s grant award was equal to the amount of
COVID-19-related revenue loss (up to the program’s limits)
Eligibility Rules
the applicant experienced, as determined by formulas. In
RRF grants were designed to assist applicants in remaining
the SBA’s RRF Program Guide, these formulas varied, in
open or reopening. Permanently closed businesses were not
part, based on the date an eligible entity began operations
eligible, and temporarily closed businesses were required to
(e.g., the date it started sales). Separate formulas
reopen soon, with eligible expenses incurred by March 11,
determined grant amounts for applicants that began
2021, at the latest.
operations on or before January 1, 2019; partially through
2019; on or between January 1, 2020, and March 10, 2021,
To qualify for the RRF, for-profit businesses (together with
or applicants that had not yet opened for sales but, as of
their affiliated businesses) may not have owned or operated
March 11, 2021, had incurred eligible expenses. The SBA’s
more than 20 locations as of March 13, 2020, regardless of
RRF Program Guide contains step-by-step calculation
whether those locations do business under the same or
instructions.
multiple names. For RRF purposes, a business is affiliated
with another if it has an equity or right to profit
For example, entities that began operations on or before
distributions of not less than 50% or if an eligible entity has
January 1, 2019, could receive the difference between their
the contractual authority to control the direction of the
gross receipts as reported on 2019 and 2020 federal income
business.
tax returns, excluding any amounts received from a list of
specified sources (including the SBA’s PPP, Economic
Other ineligible entities included state or local government-
Injury Disaster Loan [EIDL] Program, EIDL Advance
operated businesses, an entity that had received or had a
Payment Program, Targeted EIDL Program, and debt relief
pending application for the SBA’s Shuttered Venue
payments). If the applicant received a PPP loan or EIDL,
Operators Grant program, nonprofit organizations, and
those amounts were subtracted from the RRF grant amount.
publicly traded companies. Certain businesses that had filed
for bankruptcy also were ineligible.
Eligible Expenses
Grant proceeds may be used for
The SBA required RRF applicants to certify that current
economic uncertainty made this funding request “necessary
business payroll costs (including sick leave);
to support the ongoing or anticipated operations.”
business utility payments;
Grant Amounts
business debt service (not including any prepayment of
P.L. 117-2 required the SBA to set aside $5 billion for
principal or interest);
applicants with 2019 gross receipts of not more than
business maintenance expenses;
$500,000 and to distribute the remaining $23.6 billion in an
outdoor seating construction;
equitable manner to applicants of different sizes based on
business supplies (including protective equipment and
annual gross receipts. To meet this latter directive, the SBA
cleaning materials);
set aside an additional $4 billion for applicants with 2019
business food and beverage expenses (including raw
gross receipts from $500,001 to $1.5 million and an
materials);
additional $500 million for applicants with 2019 gross
receipts of not more than $50,000 “to ensure that the
covered supplier costs; and
business operating expenses.
https://crsreports.congress.gov
SBA Restaurant Revitalization Fund Grants
RRF funds must be used by March 11, 2023, on eligible
On July 2, 2021, the SBA announced the RRF’s closure.
expenses incurred beginning February 15, 2020, and ending
The RRF application portal remained open until July 14,
March 11, 2023. Unused funds must be returned to the
2021, to allow applicants to check their status, address
SBA.
payment corrections, or ask questions. The SBA also
announced that, as of June 30, 2021, it had received more
RRF recipients are required to report their spending
than 278,000 eligible applications requesting over $72.2
(whether complete or not) by December 31, 2021, and
billion in grants and had provided grants to approximately
certify that the proceeds were used on eligible expenses.
101,000 applicants. Underserved populations received
More information on this certification process likely will be
approximately $18 billion of the $28.6 billion in grant
detailed in future SBA regulations and guidance.
awards, including about $7 billion to women-owned
businesses, $6.7 billion to businesses owned by socially and
Applications Exceed $76 Billion
economically disadvantaged individuals, $2.8 billion to
The SBA completed a seven-day pilot test period for the
businesses owned by representatives of multiple
RRF application portal to identify and address any technical
underserved populations, and $1 billion to veteran-owned
issues prior to the portal’s opening, which took place at
businesses.
noon on May 3, 2021. Participants in the pilot were
randomly selected from existing PPP borrowers in priority
Legal Challenges
groups for the RRF. These participants did not receive RRF
After the SBA launched the RRF, three lawsuits were filed
funds until the application portal was opened to the public.
challenging the constitutionality of the RRF’s 21-day
priority application period. Federal courts, including a
RRF applications were submitted through a recognized
three-judge panel of the U.S. Court of Appeals for the Sixth
SBA Restaurant Partner (SBA-specified technology
Circuit, ruled against the SBA in each of these lawsuits.
companies that serve the restaurant industry) or directly on
The courts held that the SBA’s prioritization of RRF funds
the SBA website. Applicants needing assistance preparing
on the basis of social disadvantage because of race and
their applications were directed to contact their local SBA
gender was unconstitutional under the Equal Protection
district office or call the SBA’s call center support number
Clause. The court ordered the SBA to fund the plaintiffs’
at 1-844-279-8898.
grant applications, if approved, before all later-filed
applications, without regard to processing time or the
On May 12, 2021, the SBA announced it had received more
applicants’ race or gender. The court decisions did not
than 266,000 applications requesting over $65 billion in
affect the SBA’s prioritization for veteran-owned
funds, far greater than its $28.6 billion authorized amount.
businesses in accordance with the law.
Nearly half of the applications were submitted by women,
veterans, and socially and economically disadvantaged
In response to these court rulings, the SBA sent letters to
business owners. The SBA received requests for $330
2,965 priority RRF applicants who had been notified that
million from businesses with not more than $50,000 in
their applications had been approved but had not yet
revenue (the set-aside for this group was at least $500
received their grant funds, informing them that the agency
million), $8.14 billion from businesses with revenue of not
“will not be able to disburse your Restaurant Revitalization
more than $500,000 (the set-aside for this group was at
Fund award.” Instead, those approvals will be paid only
least $5 billion), and $15.1 billion from businesses with
once the SBA completes processing all previously filed
revenue of $500,001 to $1.5 million (the set-aside for this
non-priority applications and only if the RRF is not first
group was at least an additional $4 billion).
exhausted.
Because the demand from applicants exceeded the RRF’s
Legislation
budgetary authority, the SBA closed the application portal
On April 7, 2022, the House passed H.R. 3807, the
to most applicants. Applications were accepted until May
Restaurant Revitalization Fund Replenishment Act of 2022.
24 from applicants with revenue up to $50,000 because the
The bill would provide $42 billion to replenish the RRF.
budget authority set aside for these applicants had not yet
Priority is to be provided to previous RRF applicants that
been exhausted.
did not receive an award. The bill also would provide $13
billion for a Hard Hit Industries Award Program for small
Between May 3, 2021, and May 24, 2021, the SBA
businesses with not more than 200 employees that suffered
processed applications from priority groups and held
revenue loss of at least 40% during the pandemic. These
applications from non-priority applicants but retained their
awards are to be made without regard to what industries
place in the processing queue based on the order in which
they operate in, with grants capped at $1 million each. First
the applications were filed. On May 25, 2021, the SBA
priority is to be provided to businesses that have
began processing all non-priority applications with FY2019
experienced pandemic-related revenue loss of at least 80%.
gross revenue less than $50,000. On May 27, 2021, the
Second priority is to be provided to businesses that have
SBA began processing non-priority applicants on a first-
experienced pandemic-related revenue loss of at least 60%.
come, first-served basis.
Several other RRF-related bills of interest include H.R.
As of May 26, 2021, the SBA had received more than
4568, H.R. 7407, S. 255, S. 2091, and S. 4008.
372,000 applications requesting over $76 billion in funds
and had distributed about $16 billion to more than 63,000
Robert Jay Dilger, Senior Specialist in American National
applicants.
Government
https://crsreports.congress.gov
SBA Restaurant Revitalization Fund Grants
IF11819
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https://crsreports.congress.gov | IF11819 · VERSION 10 · UPDATED