March 15

The American Rescue Plan: What It Means for Restaurants

Congress just passed a third COVID-19 related stimulus package, but this one includes $28.6 billion, just for restaurants. Here’s what you need to know:

It’s been over a year since the coronavirus shook the world, and boy has it been a year. We’re still making our way through the pandemic, but with vaccines rolling out, new COVID cases declining, and the inclusion of a $28.6 billion Restaurant Revitalization Fund in the most recently passed stimulus package — there are a few things to get excited about. Here is a breakdown of the grant program and how it will help independent restaurants get to the other side of the pandemic.

What is it?
The Restaurant Revitalization Fund will bring financial aid to eligible restaurants across the nation through tax-free federal grants. The grant program includes $28.6 billion to distribute to food and drink establishments that apply for funds.

The amount a restaurant could receive is substantial, capping at $10 million for restaurant groups and $5 million for single-door establishments. The grants can be used for a wide variety of expenses like:

• Payroll, employee benefits, and paid sick leave
• Mortgage, rent, and utilities
• Maintenance (including costs for outdoor seating structures and equipment)
• PPE and cleaning supplies
• Food and drink costs
• Supplier costs

Unlike PPP loans, grants don’t need to be paid back or forgiven — there is a time frame to spend the money that recipients should be aware of though. Grant funds can be used to cover expenses starting in February 2020 through the end of 2021. After the deadline, any remaining funds will need to be returned to the Treasury.

Who is eligible? 
Restaurants, bars, tasting rooms, taprooms, food trucks, caterers, and other food and drink establishments with 20 or fewer locations are eligible to apply for a grant.

Food and Drink establishments that are government-run, publicly-traded or function out of an airport, or have more than 20 locations under the same or different name do not qualify to partake in this grant program.

How do I apply?
The application period is expected to open within the next couple of weeks. And once the program is live, restaurants can apply for a grant through the SBA website.

Each business that applies will need to submit a good faith certification. The good faith certification proclaims, “the uncertainty of current economic conditions makes necessary the grant request to support the ongoing operations of the eligible entity; and the eligible entity has not applied for or received a grant under section 324 of the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (title III of division N of Public Law 116–260).”

How are grants calculated? 
Grants will be calculated by subtracting a business’ total gross revenue in 2020, from that of 2019 to determine pandemic-related revenue loss.

If a business was only operating in part of 2019, the National Restaurant Association claims that the total funds will be calculated by subtracting 12 times the average monthly gross revenue in 2019, by the average in 2020.

And for businesses that didn’t open until 2020, their grant calculation will be “equal to the amount of eligible expenses subtracted by its gross receipts received.”

Are there any priority groups?
For the first 21 days of accepting applications, the SBA will prioritize small businesses owned by women, veterans, and economically and socially disadvantaged groups. In the first 60 days of accepting grant applications, the Small Business Administration is designating $5 billion for restaurants with gross revenue of $500,000 or less during 2019. The remaining $23.6 billion will be administered to other qualifying restaurants.

More good news… 
With congress passing the American Rescue Plan, restaurants nationwide can finally let out a much-need, albeit small, breath of air. In addition to the grants for restaurants, the stimulus bill includes funding for a robust national vaccine program. The quicker we rollout vaccinations, the safer it is for restaurants to re-open and employees to come back to work. In the meantime, the bill extends Unemployment Benefits through the first week of September, including a $300 weekly boost, and another round of one-time stimulus checks starting at $1,400 per qualifying individual. With more cash in hand, consumers feel more confident and are more likely to spend money – meaning restaurants can expect to see more customers as COVID case counts decline and public health restrictions are removed.

The Restaurant Revitalization Fund is a huge success for the restaurant industry and it goes to show that government advocacy does work when we work together! We’d like to give a huge shout-out to the Independent Restaurant Coalition who spearheaded the RESTAURANT’s Act and made this valuable relief possible. Thank you for showing up and standing up for our nation’s independent restaurants!

About the author


Ashley McNally likes to cook, loves to bake, and is always dreaming of her next meal. With over 13 years of experience working in various roles within a restaurant — McNally has made a home in hospitality.


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