Last Day for Small Restaurants in Feds’ ‘Revitalization Fund’
May 24, 2021
Restaurants were particularly hard-hit by the government’s COVID-19 pandemic-related shutdowns and occupancy restrictions. Aside from litigating to demand compensation from state and local governments, eligible restaurants have one day left to apply for the Restaurant Revitalization Fund, a new round of $28.6 billion in federal assistance specifically for restaurant owners launched by the Small Business Administration. Applications close at 8:00 pm ET on May 24, 2021.
The Restaurant Revitalization Fund program opened on May 3, and a last call for applications was made on May 18. For the first 21 days of the program (May 3-23), only restaurants owned 51% or more by applicants who are women, veterans, or “socially and economically disadvantaged” were processed. The socially and economically disadvantaged include Americans who are black, Hispanic, native American, Asian-Pacific, or Subcontinent Asian. Others could apply after May 23 if there is money left.
Restaurant owners should carefully review the instructions to determine what must be submitted with the application. Highlights include:
Restaurant must be currently in operation. You can’t have closed permanently.
There is a cap of $5 million per location, up to $10 million for the applicant if there are multiple locations.
Your restaurant must be a “small business,” defined in general to have average annual receipts under $7.5 million.
Funds must be used for regular business purposes. There is a list of qualifying uses of the funds in the instructions for the application.
Restaurant can’t be in bankruptcy unless it’s operating under a confirmed Chapter 11 or 13 plan.
Applicant’s net worth has to be less than $750,000, and his or her AGI for last three years can’t be more than $350,000. The applicant’s assets can’t be worth more than $6 million (excluding the restaurant itself).
You cannot be in default to the federal government on any amounts owed (taxes, SBA loans, etc.).
According to the SBA, there are several tiers of applicants under the law, based on gross receipts: The initial $5-billion set-aside was for applicants with gross receipts not more than $500,000. The SBA created two additional funding allocations for the smallest restaurants: 1) $500 million for applicants with 2019 gross receipts not more than $50,000; and 2) $4 billion for applicants with 2019 gross receipts between $500,000 and $1,500,000.
“Because SBA still has potential set-aside funding available for eligible establishments with 2019 annual revenue of not more than $50,000, it will keep the application portal open until Monday, May 24, 8 p.m. ET,” according to the SBA. “While all qualified restaurants may submit applications, more than $220 million of a $500 million set-aside remains.”
You can find more information and apply online here: https://www.sba.gov/funding-programs/loans/covid-19-relief-options/restaurant-revitalization-fund.