Now that the $1.9 trillion American Rescue Plan has been signed into law, it has created the $28.6 billion Restaurant Revitalization Fund (RRF). Read our latest blog post to get all the details on the Restaurant Revitalization Fund.
Restaurant365 is closely monitoring news from the federal government on the Restaurant Revitalization Fund. When the legislation was passed on March 11, the Small Business Administration (SBA) set an April target to begin taking applications, but as of April 12, 2021, the SBA has not released a date for accepting grant applications, nor released specific details about the grant application process. As soon as there is any news from the SBA, this blog post will be updated.
Updated April 12, 2021
Many news outlets have been referring to a $25 billion RESTAURANTS Act, but no such act exists. This timeline will help to clarify the confusion between the $120 billion RESTAURANTS Act and the $25 billion Restaurant Rescue Plan (increased to $28.6 billion in the final iteration of the bill). Read the separate blog post for details on the Restaurant Revitalization Fund.
June 15, 2020: The Real Economic Support That Acknowledges Unique Restaurant Assistance Needed to Survive Act (RESTAURANTS Act of 2020) was introduced in a previous session of Congress and was passed by the House but was not voted on by the Senate.
February 4, 2021: In a 90-10 Senate vote, the Restaurant Rescue Plan, a $25 billion grant relief program for restaurants, was added to the American Rescue Plan, a $1.9 trillion economic stimulus package to speed up recovery from the economic and health effects of the COVID-19 pandemic and the ongoing recession. (The Restaurant Rescue Plan in the current bill headed to Congress is now $28.6 billion.)
February 5, 2021: In a separate action, the $120 billion RESTAURANTS Act of 2021 was introduced to establish a $120 billion revitalization fund to support independent restaurants and small franchisees as they deal with the long-term structural challenges facing the industry due to COVID-19.
February 26, 2021: The House is expected to vote on the $1.9 trillion American Rescue Plan, an economic stimulus package which includes the Restaurant Rescue Plan. If it passes, it will move to the Senate.
February 27, 2021: Working into the wee hours of the morning, the House voted 219-to-212 early Saturday to pass the American Rescue Plan. The $1.9 trillion stimulus package will now go to the Senate where it requires 51 votes to pass through reconciliation.
March 6, 2021: The Senate passed the $1.9 trillion COVID-19 relief package. As currently written, the bill includes $28.6 billion for the Restaurant Rescue Plan to help the beleaguered restaurant industry. The bill is expected to receive final approval by the House and be signed by President Joe Biden before federal unemployment benefits expire on March 14.
March 10, 2021: The House passed the American Rescue plan and the bill is expected to get President Biden’s signature by the end of the week.
March 11, 2021: President Biden signed the American Rescue Plan with $28.6 billion in restaurant relief into law.
The reintroduced RESTAURANTS Act is separate from the Restaurant Rescue Plan that was introduced in the budget resolution amendment passed by the Senate on Feb. 4, 2021. If the entire $1.9 trillion COVID-19 relief bill passes, the Restaurant Rescue Plan would provide a much-needed stopgap for the restaurant industry in the form of grants to restaurants hurt by the pandemic. The details have not yet been made public, but experts say the program will closely mirror the RESTAURANTS Act, including grants of up to $10 million for restaurants hurt by the pandemic. Details of the grant program will be established after the budget reconciliation process is complete and should be made public in the coming weeks. We will update this article as details are released.
Though the $28.6 billion amount in the Restaurant Rescue Plan falls short of the $120 billion proposed in the RESTAURANTS Act, the creation of a dedicated grant fund means it can likely be replenished in the future, similarly to how the Paycheck Protection Program (PPP) was replenished throughout 2020.
The following are highlights of the RESTAURANTS Act of 2021.
- The fund will be made available to restaurants, food trucks, food stands, food carts, caterers, taverns, bars, saloons, inns, lounges, brew pubs, taprooms, tasting rooms, licensed facilities or other similar places of business that are part of a group of restaurants of 20 or fewer locations.
- The grant could cover any eligible expenses incurred between Feb. 15, 2020 and ending eight months after the Act’s enactment date.
- The award calculation will be based off annual revenue losses from 2019 and 2020 rather than quarterly.
- If a grant recipient has already received a grant or loan under the PPP or EIDL program, the maximum value of the Restaurant Revitalization Grant will be reduced by the amount of PPP or EIDL funds spent.
- Eligible expenses: payroll (not including employee compensation exceeding $100,000 per year), benefits, utilities, rent, mortgage, maintenance (including construction of outdoor seating), supplies (including PPE and cleaning materials), food, paid sick leave, operational expenses, debt obligations to suppliers, and any other essential expenses.
- The maximum grant value will not exceed $10 million.
- Grant eligibility will also be provided for new restaurants that opened after Jan. 1, 2020.
- Paid sick leave for employees, as well as a bonus amount to cover the cost of voluntarily providing 10 days of sick leave to employees will be eligible expenses.
- Restaurants can use both the Employee Retention Tax Credit (ERTC) and the RESTAURANTS Act grant program, but not used for the same expenses.
The National Restaurant Association (NRA) and the Independent Restaurant Coalition is asking businesses to urge their legislators to co-sponsor the RESTAURANTS Act of 2021. This bill builds on a concept first proposed to Congress by the NRA in March 2020.
If you’re a Restaurant365 customer, financial reporting in Restaurant365 will help you to provide the documentation you need to apply for a grant after these programs are passed and applications for grants are accepted.
For the latest details on the Restaurant Revitalization Fund created by the passing of the $1.9 trillion American Rescue Plan, read the latest blog post, How Will the $28.6 Billion Restaurant Revitalization Fund Affect Your Restaurant Business? Get the Details.
This blog post has been prepared for informational purposes only, and is not intended to provide, and should not be relied on, for advice on applying for a grant. You should consult your own tax advisor or CPA if you have questions about how the RESTAURANTS Act or Restaurant Rescue Plan may affect your restaurant business.