In the gigantic $1.9 trillion American Rescue Plan Act signed by President Biden last week, $28.6 Billion have been allocated to the Restaurant Revitalization Fund (RRV), a tax-free grant program that will be administered by the Small Business Administration (SBA) to save the hospitality industry.
Eligible restaurants and other food service and drinking establishments will not be required to pay back the funds received as long as used for qualifying expenses incurred from 02/15/2020 through 12/31/2021, such as payroll and wage benefits, rent, mortgage payments, food and beverages purchases, utilities, maintenance, outdoor seating, and personal protective equipment expenses.
The amount of the grant will be established pursuant to a formula meant to determine the amount of revenue loss caused by the COVID 19 pandemic:
- Businesses open prior to 2019 = (2019 revenue) – (2020 revenue + Paycheck Protection Program loans received);
- Businesses open in 2019 = (12 x 2019 revenue/months open in 2019) – (2020 revenue + Paycheck Protection Program loans received);
- Business open in 2020 = Eligible expenses incurred.
Sums received from the Economic Injury Disaster Loans (EIDL) or Employee Retention Credit (ERC) will not reduce the RRV grant, although each funding must be used to cover different expenses.
In order to be ready to submit an RRV grant application, restaurants and other food and drinking establishments should already obtain the Data Universal Numbering System Number (DUNS) and the System for Award Management Number (SAM).
The SBA is expected to issue guidelines in the next few days.
- Email: email@example.com, Phone: (212) 618 1644.
Compliments of CEA Legal P.C. – a member of the EACCNY.