Restaurants, bars and similar businesses hit hard by the COVID-19 pandemic can soon file for a relief fund that offers operators much more flexibility in how to use the money than the Paycheck Protection Program did.
The U.S. Small Business Administration recently announced details regarding the $28.6 billion Restaurant Revitalization Fund (RRF) created to help those businesses recover from the economic downturn caused by the pandemic.
Established by the American Rescue Plan Act, the RRF will provide restaurants with debt-free support equal to their pandemic-related revenue loss up to $10 million per business and no more than $5 million per physical location. Recipients are not required to repay the funding as long as funds are used by March 11, 2023.
Compared to other pandemic relief programs such as the PPP, the SBA has focused on making the RRF application and award process more streamlined, accessible and inclusive.
“We want to make sure that this program focuses on equity, and that access is first and foremost delivered,” SBA Administrator Isabella Casillas Guzman told The Atlanta Journal-Constitution.
The first 21 days that the program is open, the SBA will prioritize awarding funds to small businesses owned by women, veterans, or socially and economically disadvantaged individuals. Following that, the SBA will distribute funds in the order in which applications are approved until the money is exhausted.
Although the first three weeks are earmarked for priority groups, applications from all eligible applicants will be accepted as soon as the program launches. Applicants can register for an account in advance at restaurants.sba.gov starting at 9 a.m. April 30. The SBA will open applications beginning at noon May 3.
Besides restaurants and bars, eligible entities who have experienced pandemic-related revenue loss include food trucks, caterers, bakeries, brewpubs and breweries, wineries and distilleries, among others. This first-of-its kind grant program provides debt-free support in the amount of annual revenue lost from 2019 and 2020, with special provisions for businesses that opened in 2020 and 2019. Grants can only be used on eligible expenses incurred starting on Feb. 15, 2020, and ending on March 11, 2023.
Compared to the PPP, the RRF offers more flexibility in how operators can use the money. Eligible expenses include payroll, employee benefits and paid sick leave; mortgage, rent and utilities; maintenance; outdoor seating construction; supplies, protective equipment and cleaning materials; food and beverage; operational expenses; and principal payments for business debt.
“The funds include an expansive list of eligible use, unlike the PPP,” Guzman said. “We want to deliver relief in a way that is usable to them.”
In taking what Guzman called a “customer-first approach,” the SBA has created multiple ways for businesses to apply. Not only will operators be able to apply online at restaurants.sba.gov, but also they can apply via phone at 844-279-8898 or through select point-of-sale service providers, including Square, Toast, Clover and NCR. Applicants working with a point-of-sale vendor do not need to register beforehand on the site.
Guzman noted that the application review process, estimated at about 14 days, would take the same amount of time, regardless of the method used to submit an application. “There’s not a faster lane. We’re just trying to make it easier to apply,” she said.
The process also looks to better assist businesses whose owners do not speak English as a first language. “This is the first time any SBA application for funds of any kind has been offered in Spanish,” noted Guzman. In addition, the RRF Program Guide is available in 19 languages, and the administration offers phone support in numerous languages.
Despite efforts to serve all deserving businesses, Guzman noted that not every eligible restaurant would be awarded grant money for this first-come, first-served program. “We know that demand exceeds the $28.6 billion in funds that the bill has established. There won’t be funds for everyone.”
Her message to prospective business owners: “It’s important that you get ready. Review the application sample and get ready to apply.”
Details about the RRF can be found at sba.gov/funding-programs/loans/covid-19-relief-options/restaurant-revitalization-fund.
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