On March 11, 2021, President Biden signed the “American Rescue Plan Act of 2021”, a $1.9 trillion stimulus bill aimed at curbing the economic toll of the COVID-19 pandemic. As part of a comprehensive relief package, the American Rescue Plan establishes a $28 billion Restaurants Revitalization Fund (“RRF”) to provide direct grants to restaurants and other food and beverage businesses.
The RRF will provide grants to eligible businesses based on pandemic-related revenue loss, up to a maximum of $10 million per recipient and $5 million per physical location. The RRF has earmarked $5 billion for small businesses—those with 2019 gross receipts of $500,000 or less. The Small Business Administration (the “SBA”) will administer the remaining $23.6 billion “in an equitable manner to eligible entities of different sizes based on annual gross receipts.” However, not all restaurants and food and beverage related businesses are eligible for RRF grants. Applicants for RRF funds must take into consideration their revenue, structure, operating history, and financial need to understand their eligibility and potential grant amount. While we expect the SBA to publish new regulations and guidance in the coming weeks, we encourage restaurants and other prospective grantees to begin preparing their application in advance of the official program launch date, in order to maximize chances of obtaining a portion of the earmarked RRF funds.
Overview of the Restaurant Relief Fund
Given the fast pace of developments, businesses are encouraged to seek advice from qualified legal counsel concerning these matters.
For more information, please see the following resources:
1. Prior Haynes and Boone Guidance on the Paycheck Protection Program:
a. Congress Revises PPP Rules for Existing Borrowers; Allows Certain Borrowers to Access Second Round of Funding (December 22, 2020)
b. SBA Issues Clarifying Guidance for PPP Borrowers in M&A Transactions (October 7, 2020)
c. Full List of Haynes and Boone Alerts on PPP
2. Prior SBA Guidance on the Paycheck Protection Program:
a. PPP Frequently Asked Questions (updated March 12, 2021)
b. PPP – Frequently Asked Questions on Loan Forgiveness (updated October 13, 2020)
c. Full List of SBA Guidance and Regulations
3. Resources on the SBA Shuttered Venue Operators Grant Program
a. After Months of Deadlock, Congress Extends Lifeline for the Arts and Entertainment Industry through the Shuttered Venue Operators Grant Program (Haynes and Boone Alert, December 30, 2020)
b. SBA Shuttered Venue Operators Grant Page
4. Resources on the SBA Economic Injury Disaster Loan (EIDL) Program.
a. Looking for an Alternative to PPP? Taking a Second Look at the Economic Injury Disaster Loan Program (Haynes and Boone Alert, May 1, 2020).
b. SBA's COVID-19 Disaster Loan Program (Haynes and Boone Alert, March 24, 2020)