This week, President Biden signed the $1.9 Trillion American Rescue Plan. This is the third major stimulus package passed by the Federal Government in response to the COVID-19 pandemic. While there has been much discussion about relief to individuals including a new round of $1400 stimulus checks & unemployment benefit extensions as well as increased funding for vaccine purchase & distribution, this blog post will focus on the relief programs impacting businesses including the creation of the Restaurant Revitalization Fund, expansions and changes to the PPP & EIDL loan programs, and expansions and changes to the Employee Retention Tax Credit Program. The full text of the law can be found here.
Restaurant Revitalization Fund
Edit: An updated post specific to the Restaurant Revitalization Fund & how to prepare for an application can be found here.
- Restaurants, bars, & other elligible entities will be elligible to apply for a grant equal to 2019 revenue minus 2020 revenue minus PPP loans already received.
- Businesses that opened in 2019 will determine their amount of grant eligibility by multiplying their average monthly gross revenue in 2019 by 12.
- Businesses that opened in 2020 that experienced operating losses will be elligible for a grant under a similar formula that covers losses incurred.
- Businesses that have not yet opened but that have already incurred payroll costs will be elligible for a grant that covers those expenses.
- *Note: Formulas for determining grant eligibility for all three above categories may be modified via SBA guidance.
- Elligible entities include: 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, or other similar place of business in which the public or patrons assemble for the primary purpose of being served food or drink.
- Publicly traded companies & businesses with more than 20 locations are not elligible.
- Guidance has suggested that individual franchisees owning fewer than 20 locations will be elligible.
- Maximum grant amounts are $5 million for any single location and $10 million total for all locations owned by an entity.
- These grants can be utilized for virtually any day-to-day operating expenses with the added allowable expense of any construction to accommodate outdoor seating.
- Congress funded this program with $28.6 billion. $5 billion is set aside to entities with less than $500,000 in annual revenue.
- It is estimated that roughly $250 billion of restaurant revenue was lost between March and December 2020, so this program will not be able to cover all lost revenue. Restaurant owners are encouraged to prepare to apply as soon as they are elligible to to ensure access to these funds.
- Because funds in this program are limited, restaurants elligible for first or second draw PPP loans are still encouraged to apply for those loans as there is more availability of funds in the PPP program.
- For the first 21 days of this program, application will be limited to small businesses owned by women, veterans, and socially and economically disadvantaged small business concerns (including most minority owned businesses).
How to Prepare for a Restaurant Revitalization Fund Grant Application
- The SBA still needs to release guidance & a process for how to apply for this program, but there are a couple of steps restaurant owners can take to ensure that they are able to apply as soon as possible.
- It is expected that both a DUNS number and a SAM account will be needed to apply for this grant program. Businesses are encouraged to gather this information or register for them prior to the grant application being released.
- A businesses that needs to look up a DUNS number can do so here.
- A business that needs to apply for a DUNS number can do so here. Application for a DUNS number can take up to 2 days.
- SAM.gov (System for Award Management) is the website the US Government utilizes when working with contractors. It is expected that a SAM account will be required to receive this grant. Once a business has their DUNS number, they should follow the instructions at SAM.gov to set up an account. This may take up to two weeks so businesses are encouraged to take action immediately.
- The National Restaurant Association will be releasing additional information and guidance at RestaurantsAct.com.
Shuttered Venue Operator Grant Changes
- Initially, elligible businesses could not take advantage of both the Shuttered Venue Operator (SVO) Grant Program and a Paycheck Protection Program loan. This is no longer the case. Businesses that are waiting for the application for the SVO program to open can apply for a PPP loan. There is still no update on when the SVO program will open.
Paycheck Protection Program Changes
- The Paycheck Protection Program was funded with an additional $7.25 billion.
- Additional 501(c) entities were made elligible for the program.
- The application deadline was not extended past March 31, 2021. While there is hope for legislation that will extend that deadline, businesses are encouraged to complete PPP applications prior to the current deadline.
Employee Retention Tax Credit Changes
- The fully refundable Employee Retention Tax Credit of 70% of $10,000 of wages paid per quarter was extended two additional quarters covering all of 2021.
- Businesses that opened after February 15, 2020 are now elligible as a “recovery startup business” if they have had less than $1 million in gross receipts.
Economic Injury Disaster Loan Changes
- $15 billion has been added to the targeted EIDL advances of $10,000 to elligible businesses that did not already receive the full $10,000 advances.
Families First Coronavirus Response Act Changes
- FFCRA tax credits for paid leave provided to employees have been expanded to a maximum of $12,000 per employee.
- Any paid time taken by employees to receive vaccinations is now elligible for reimbursement.
- While the tax credits still exist, leave is no longer mandated.
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