SBA's Restaurant Revitalization Fund Runs Dry in 21 Days
Updated: May 29
As the first applications for up to $10 million in new federal assistance were accepted, restaurant leaders warned that the $28.6 billion Restaurant Revitalization Fund (RRF) could run dry before many restaurants have a shot at the aid. Demand hit $76 billion, more than double the available funds. Pressure mounts to replenish the Small Business Administration's (SBA) Restaurant Revitalization Fund after running out in 21 days.
Up until May 24th, preference during application was given to restaurants that are at least 51% owned by women, veterans or “socially and economically disadvantaged individuals.”
Under the RRF component of the American Rescue Plan enacted in mid-March, restaurants can apply for grants of up to $5 million per location, or $10 million for multi-unit operators. Eligibility is limited to businesses with 20 or fewer locations. The average award to the 16,000 initial recipients was $125,000. The grant amount is determined by subtracting an applicant’s 2020 revenues and any previous federal aid from the operator’s 2019 revenues.
The money can be spent on most operating expenses, including rent, payroll, food and beverage supplies, and debt service. The funds can also be used to build outdoor dining areas. Publicly owned companies are ineligible.
The SBA’s $29-billion grant program stopped receiving applications on Monday, May 24. A week earlier, the SBA had already received more than 300,000 applications representing $69 billion, and it had approved nearly 38,000 of those requests, for more than $6 billion.
Restaurants requesting aid from the $28.6 billion Restaurant Revitalization Fund may not be out of luck due to the fund running out of money, a federal official revealed Wednesday. Testifying before a Senate committee, SBA chief Isabel Guzman assured lawmakers that the applications in limbo would automatically be put in a queue for consideration of a grant if Congress re-ups the fund.
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