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Small businesses will soon be able to apply for grants from the SBA.

The Small Business Administration will likely open up Restaurant Revitalization Fund grant applications within ‘weeks, not months’

Franchisees with fewer than 20 locations are also eligible to apply, the SBA will be handling applications and more common restaurant relief questions answered

The Small Business Administration will likely open up the Restaurant Revitalization Fund grant applications “within weeks, not months,” of President Biden signing the stimulus package into law, Rep. Earl Blumenauer (D- Or.) said in a press conference with the Independent Restaurant Coalition Wednesday morning. The U.S. House of Representatives passed the $1.9 trillion American Rescue Plan Wednesday and Biden is expected to sign the bill by Friday afternoon.

Blumenauer and Senate Majority Leader Chuck Schumer (D- N.Y.) held the press conference with members of the Independent Restaurant Coalition and high-profile restaurant owners Wednesday morning to discuss how the Restaurant Revitalization Fund will impact small restaurants and bars around the country.

“We’re filled with hope that this proposal is finally going to head to the president’s desk, but lots more work needs to be done,” Blumenauer said Wednesday. “We have a trillion-dollar supply chain that we need to work to strengthen. We need to work with the White House and make sure it helps our hardest hit restaurants. This is the start of the great American restaurant recovery.”

After the bill was voted on initially by the House on March 1, the Senate increased the amount of money for restaurants from the initially proposed $25 billion to $28.6 billion. The funding would be divided into government-funded grants with a maximum of $10 million per restaurant group or $5 million per individual restaurant location. Eligible businesses include foodservice and drinking establishments that are not part of an affiliated restaurant group with more than 20 locations and are not publicly traded.

Blumenauer, Schumer and the Independent Restaurant Coalition answered some common questions operators might have about the upcoming grants program:

When can I apply for a grant?

Much like the Paycheck Protection Program, the Restaurant Revitalization Fund grants will be distributed by the Small Business Administration. Schumer said that they will “urge the SBA to stand up for relief and set up the program as soon as the bill is signed into law,” and that first they have to confirm Biden’s nominee for Deputy Administrator of the SBA, Dilawar Syed.

Blumenauer predicted that grant applications will “open within weeks, not months.”

“This is a huge priority and […] part of what we’ve done in refining the legislation is acknowledging the failure of PPP to relate to restaurant industry,” Blumenauer said Wednesday. “It is a priority and it will take some time because we need to get word out to indie restaurants.”

Where and how can I apply for a grant?

Though the bill has not yet been signed by Biden, once the SBA opens up applications, restaurants and bars with under 20 locations that can demonstrate revenue loss over the past year will be able to apply on the SBA website. The SBA guidance will soon appear after the American Rescue Plan is signed into law.

Can smaller franchisees of large chains apply for a grant?

While independent restaurants are and have been the priority for receiving grants, according to Blumenauer, as long as franchisees meet the size requirements (under 20 locations) and are not publicly traded entities, then they can apply.

Besides size, are there any limits to who can apply for a grant?

Besides being a restaurant or bar with under 20 locations and a non-publicly traded entity, restaurants have to be able to prove that they suffered a loss of revenue over the past year and cannot have a pending application for shuttered venue operators.

How is the grant amount calculated?

For established restaurants that opened in 2018 or earlier, grants are calculated by subtracting a business’ 2020 revenue from their 2019 revenue, and also subtracting first- and second-draw PPP loans received in 2020.

For restaurants that opened in 2019, the average of 2019 monthly revenues is multiplied by 12 minus the average of 2020 monthly revenues multiplied by 12, and the first- and second-draw PPP loans received are also subtracted.

Restaurants that opened in 2020 are eligible to receive funding equal to the “eligible expenses incurred” minus their first- and second-draw PPP loans received last year. Restaurants that have not yet opened are also eligible and can receive “funding equal to eligible expenses incurred before the date of enactment.”

Where will leftover funds go?

“Any funding used inappropriately or leftover funds will go back to the government,” Independent Restaurant Coalition cofounder Erika Polmer said. “There’s been a lot of work in terms of the definition of eligible funding. It’s less onerous than the PPP and broader and the SBA is likely to administer with the idea of helping advance interest of small businesses, rather than a gotcha situation.”

See our previous article detailing the breakdown of the Restaurant Revitalization Fund here.

Contact Joanna at [email protected]

Find her on Twitter: @JoannaFantozzi


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