As leading advocates for client restaurants and bars seeking to recover unpaid insurance monies, Lieff Cabraser is gratified to announce that as part of the country’s new stimulus package, the SBA (Small Business Administration) began accepting Restaurant Revitalization Fund grant applications on May 3, 2021.
Initial results indicated the launch was hugely successful: the SBA received over 186,000 applications from restaurants and other food and beverage businesses from all 50 states and the District of Columbia.
The $28.6 billion program, signed into law by President Joe Biden as part of the American Rescue Plan, provides economic aid to restaurants and other establishments struggling to make ends meet as a result of the pandemic.
The SBA can adjust awards based on demand and “relative local costs” in the markets where Restaurant Revitalization Fund businesses operate. Otherwise:
- $23.6 billion is available for the SBA to award in an equitable manner to businesses of different sizes based on annual gross receipts.
- $5 billion is available to businesses with gross receipts of $500,000 or less during 2019.
- Total grant amount for an eligible business and any affiliated businesses is capped at $10 million and is limited to $5 million per physical location of the business.
For an initial 21-day period, the SBA prioritized awarding grants for small business concerns owned and controlled by women, veterans, or socially and economically disadvantaged small business concerns.
“Eligible expenses” were those incurred from February 15, 2020 to December 31, 2020 (or a date determined by the SBA).
Funds must have been spent on payroll; principal or interest on mortgage obligations; rent; utilities; maintenance including construction to accommodate outdoor seating; supplies such as protective equipment and cleaning materials; normal food and beverage inventory; certain covered supplier costs; operational expenses; paid sick leave; and any other expenses the SBA determines to be essential to maintaining operations.
Grants are not taxed like income and all normal federal tax deductions are protected.
Please check the SBA website for updated information.