SBA to Distribute Restaurant Revitalization Funds in April

Patrick Kelley, associate administrator for the Small Business Administration’s Office of Capital Access, told a Senate Small Business Committee hearing that the SBA expects to launch a phased rollout of the $28.6 billion Restaurant Revitalization Fund in early April, according to the Journal of Accountancy.

The Restaurant Revitalization Fund is part of the $1.9 trillion American Rescue Plan Act of 2021, signed into law on March 11, 2021. While the RRF is similar to the Paycheck Protection Program, its amounts are based on lost revenue rather than payroll, according to LanePowell, which published an analysis of the measure in Lexology. The program is administered directly by the SBA instead of bank loans guaranteed by the SBA.

The rescue plan language defines eligible entities as “a restaurant, food stand, food truck, food cart, caterer, saloon, inn, tavern, bar, lounge, brewpub, tasting room, taproom, licensed facility or premise of a beverage alcohol producer where the public may taste, sample, or purchase products, and other similar places where the public or patrons assemble for the primary purpose of being served food or drink,” according to Lexology.

The RFF provides up to $10 million per entity, or $5 million per physical location, according to The Journal of Accountancy. Kelley says the SBA is working on a technological solution to distribute the funds.

The funds may be used to cover payroll costs, principal and interest payments on mortgages, rent payments, utilities, maintenance expenses, supplier costs, operational expenses, paid sick leave, supplies, and food and beverage expenses, according to The Journal of Accountancy.

It’s no secret that the pandemic has hit the restaurant industry hard as stay-at-home orders kept people out of restaurants in many parts of the country.

Restaurant workers were particularly affected, with more than 8 million eating and drinking place employees laid off or furloughed during the peak of the lockdowns, according to the National Restaurant Association. At the end of 2020, the eating and drinking place sector finished 2.5 million jobs below its pre-coronavirus level.

A staggering amount of eating and drinking places, 110,000, closed long term or for good. The majority of those permanently closed restaurants had been in operation for 16 years, while 16% had been open for at least 30 years.

The restaurants that did survive shifted to off-premises foodservice, streamlined menus, set up outdoor dining, marketed discount deals, bundled and blended meals, and sold alcohol to go. The National Restaurant Association says operators adopted contactless order and payment technologies at an accelerated pace. The vast majority of these operators plan to keep at least some of the changes they made to their restaurant during the pandemic.