April 14, 2021
Diane S. Kotkin
On March 11, 2021, President Biden signed a $1.9 trillion stimulus package called the American Rescue Plan Act of 2021. The Act provides for additional PPP funding and extends the eligibility of PPP loans to certain non-profits and digital news services.
The Act also established the Restaurant Revitalization Fund which provides new funding for all the breweries, restaurants and eateries out there who have been impacted by COVID and the economic downturn.
Per Section 5003 of the Act, restaurants, food stands and trucks, pubs, and other similar businesses where the public assemble for the primary purpose of being served food or drink, will be eligible for relief grants from this newly established $28.6 billion Fund. The funding will be administered by the SBA and will be used to provide grants of up to $10million to eligible applicants.
There are limitations to the amount a business can request. The amount of each grant may not exceed the applicant’s pandemic-related revenue loss,” which is generally defined as the difference between the applicant’s 2019 and 2020 gross receipts. The grants can be used for a variety of expenses including payroll costs, principal and interest on a mortgage, rent payments, utilities, maintenance expenses (including the construction of outdoor seating), supplies (including protective equipment and cleaning supplies), food and beverage expenses, supplier costs, operational expenses, paid sick leave, and other expenses determined by the SBA to be essential.
It is anticipated that these funds will be available in May or June of 2021. There is a 21-day priority period that is allotted for small businesses owned and controlled by women, veterans, and the socially and economically disadvantaged.
In addition, $5 billion is reserved only for applicants who had $500,000 or less in gross receipts during 2019. Applicants must make a good faith certification that (i) the uncertainty of current economic conditions makes the grant requested necessary to support their ongoing operations and (ii) that they have not applied for or received a grant under the Shuttered Venue Operators Grant program.