What You Need To Know About The Restaurant Relief Fund
Daniel Flynn
-Managing Your Digital Information eBook
-Run Your Free Business Report
As you well know, the restaurant industry has been hit especially hard by the pandemic. While some businesses were able stay afloat with curbside orders, many business owners decided to close their doors altogether due to the financial pressure caused by state regulations.
Unfortunately, even the restaurant owners who have been able to open their doors once again are experiencing the lasting effects of a yearlong period where sales declined (as much as 80% in some cases) or stopped altogether.
To put things into perspective, here are some figures that have been outlined by the National Restaurant Association:
- The restaurant industry ended 2020 with total sales that were $240 billion below the Association’s pre-pandemic forecast for the year
- As of Dec. 1, 2020, more than 110,000 eating and drinking places were closed for business temporarily, or for good
As you can see, the state of the restaurant industry is nothing less than dire. And unfortunately, many smaller businesses have had a hard time recovering.
To help small business owners in the industry, Congress established the Restaurant Revitalization Fund (Restaurant Relief Fund), which is a part of the American Rescue Plan Act.
The purpose of the program is to help restaurants recover some of their pandemic-related losses, giving them the boost needed to re-open their doors & set them on a path toward financial recovery.
What You Need To Know About The “Restaurant Relief Fund”
The fund will provide resources to restaurants and other eligible businesses that have been impacted by the pandemic. The sum of funding will be dependent on the revenue losses incurred during 2020 as well as the amount of grants that have already been awarded to the business.
The program will award each eligible business up to $10 million and no more than $5 million per physical location. Recipients are not required to repay the funding as long as funds are used for eligible uses no later than March 11, 2023.
Are You Eligible For The Program?
The SBA has described the following “eligible entities who have experienced pandemic-related revenue loss” as:
- Restaurants
- Food stands, food trucks, food carts
- Caterers
- Bars, saloons, lounges, taverns
- Snack and nonalcoholic beverage bars
- Bakeries (onsite sales to the public comprise at least 33% of gross receipts)
- Brewpubs, tasting rooms, taprooms (onsite sales to the public comprise at least 33% of gross receipts)
- Breweries and/or microbreweries (onsite sales to the public comprise at least 33% of gross receipts)
- Wineries and distilleries (onsite sales to the public comprise at least 33% of gross receipts)
- Inns (onsite sales of food and beverage to the public comprise at least 33% of gross receipts)
- Licensed facilities or premises of a beverage alcohol producer where the public may taste, sample, or purchase products
How Much Will You Get?
If you’re an eligible for the grant, you may be asking yourself how much you’ll be granted by the program. Reference the following calculations to determine how much you’re eligible to receive.
Calculation #1
For applicants in operation prior to or on January 1, 2019:
2019 gross receipts minus 2020 gross receipts minus PPP loan amounts
Calculation #2
For applicants that began operations partially through 2019:
(Average 2019 monthly gross receipts x 12) minus 2020 gross receipts minus PPP loan amounts
Calculation #3
For applicants that began operations on or between January 1, 2020 and March 10, 2021 and applicants not yet opened but have incurred eligible expenses:
Amount spent on eligible expenses between February 15, 2020 and March 11, 2021 minus 2020 gross receipts minus 2021 gross receipts (through March 11, 2021) minus PPP loan amounts
For those entities who began operations partially through 2019, you may elect (at your own discretion) to use either calculation 2 or calculation 3.
Maximum and minimum amounts
SBA may provide funding up to $5 million per location, not to exceed $10 million total for the applicant and any affiliated businesses. The minimum award is $1,000.
Supporting Documentation Required
When submitting your application with the SBA, you’ll need to submit supporting documentation in order to be approved for the grant.
Documentation requirements include:
- Verification for Tax Information: IRS Form 4506-T, completed and signed by Applicant. Completion of this form digitally on the SBA platform will satisfy this requirement.
- Gross Receipts Documentation: Any of the following documents demonstrating gross receipts and, if applicable, eligible expenses
- Business tax returns (IRS Form 1120 or IRS 1120-S)
- IRS Forms 1040 Schedule C; IRS Forms 1040 Schedule F
- For a partnership: partnership’s IRS Form 1065 (including K-1s)
- Bank statements
- Externally or internally prepared financial statements such as Income Statements or Profit and Loss Statements
- Point of sale report(s), including IRS Form 1099-K
Using Your Clover To Calculate Gross Receipts
If you use Clover as your point of sale, you’re in luck! You can use their online portal to conveniently calculate necessary figures & even generate a report to attach to your RRF application with the SBA. Just follow the instructions presented by Clover here.
Submitting Your Official Application With The SBA
Once you’ve taken advantage of Clover’s tool, you’ll need to create an account with the SBA then fill out & submit an application for the grant in which you’ll provide the supporting documents described.
It’s important to note that the account creation portal is open as of Friday, April 30, 2021, but applications don’t open until Monday, May 3, 2021.
Looking Past COVID & Beyond
The re-opening of restaurants across the country is a breath of fresh air for us. Although a sense of ‘normalcy’ may seem like a pipe dream, many people are happy to return to their favorite restaurants. I’m sure business owners like you are happy to get things rolling again as well.
Our hope is that the RRF may ease your path to financial recovery. As a premier Clover partner & developer of restaurant marketing technology, we’re helping restaurants across the nations come back from the pandemic stronger than ever.
Learn more about our business-growing technologies below:
- Small Business Services For Full-Service Restaurants
- Small Business Services For Quick-Service Restaurants
For more information on our Clover applications, visit the Clover App Market. To talk with our team about growing your business, schedule a free consultation here.
Next Step?
The worst action is inaction! Our team is ready to find your next big move. Over 20 years of experience means we have the tools to get it done in your local market.
Share This Article!
-Managing Your Digital Information eBook
-Run Your Free Business Report
