By Kathy Bazan, BRC Business Consultant
In the American Rescue Plan, there is $29 billion set aside for grants to independent restaurants, Food trucks. Food stands, food carts, caterers, inns, airport terminal food vendors, tribally-owned businesses offering food and/or alcohol, bars, saloons, taverns, lounges, brew pubs, beer tap rooms, craft breweries, distilleries, wineries, and wine tasting rooms.
How large are the grants?
Maximum grant per establishment: $5,000,000. The grant size is based on the difference between the 2020 and the 2019 gross receipts minus any PPP money the business received. .
- $5 billion is set aside for small businesses with $500,000 or less in gross receipts in 2019.
Who is first in line to apply?
Any business owned and controlled by a woman, by a veteran, by a person of color, and any other socially or economically disadvantaged small business will be allowed to apply for a grant in the first three weeks of the program. (Control is 51% or more ownership in most cases.)
Which businesses are NOT eligible?
- Any business with more than 20 locations
- Public companies
- Government-operated food providers
- Some of the live venue operators who applied April 8 for the Shuttered Venue Grant
What should you do NOW to prepare to apply for the grant?
- Get a DUNS (Data Universal Numbering System) number. This number is unique to your business but is different from your EIN or tax ID numbers.
- It is free!
- It can take several days to apply and get your number. Start ASAP.
- To apply, call the Dun & Bradstreet hotline at 1-866-705-5711 or https://www.dnb.com/duns-number/get-a-duns.html.
- You will be asked for your name, business address, the year you opened, total number of employees, etc.
- Now, you need to register with the System for Award Management (SAM), a US government department, at https://www.sam.gov/SAM/
- You will need a notarized letter containing the specific information requested by SAM. Registering with SAM is how the SBA is validating your business.
What documents should you prepare now for your application?
- Your 2019 tax return
- Your 2020 tax return
- Know your 2019 revenue.
- Know your 2020 revenue.
- The amounts of any PPP loans.
- Identify expenses you already paid with PPP funds.
- Identify expenses you already paid with Employee Retention Tax Credit (ERTC).
- Note: You can’t pay the same expense from more than 1 federal program. For instance, if you paid April 2020 payroll with your PPP funds, you can’t pay April 2020 with ERTC funds too. Double dipping may work for ice cream cones but not for this!
- You can use the restaurant grant to pay future salaries.
Which businesses are eligible to apply for the grant?
If you opened your business in 2020 or any date before that, you are eligible for grants (even though you might NOT have been eligible for PPP funds). This is great news for the nearly 69,000 restaurants opened that last year.
Which agency is giving out the grants?
Small Business Administration (SBA)—the agency to which you applied for the Economic Injury Disaster Loan (EIDL).
When can you apply for a grant?
It is hoped that the SBA will have the application ready this April but there are no guarantees.
What expenses will the grants cover?
Like the Paycheck Protection Program (PPP), these grants will cover certain payroll costs, mortgage payments (principal or interest) or rent payments, utilities, maintenance expenses, supplies, food and beverage expenses, covered supplier costs, operational expenses, paid sick leave and other expenses.
During which time period can you use the grant money to pay covered expenses?
February 15, 2020- December 31, 2021.
If you don’t spend all the money in your grant, what happens?
You will return any unused grant money to the U.S. Treasury.
How and when will restaurant grants funds be distributed?
As of this writing on March 29, no one knows. The SBA has to develop the online application form (as they did for the PPP for microbusinesses…which took 9 days) or develop an application portal and an online application (which takes longer).
If this program operates like the EIDL, funds will be sent from the SBA directly to the applicant’s bank account, but we cannot promise that at this time.
As details are released by the SBA, we will alert you.
Kathy Bazan, BRC Consultant to Business Owners
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Matthew Bailey, Harvey Bines, Jeffrey Morlend, “Cooking Up Pandemic Relief: the Restaurant Revitalization Fund and Grants to Food and Beverage Providers” (https://www.jdsupra.com/legalnews/cooking-up-pandemic-relief-the-8475056/)
Eric Kintner, Magnolia Movido, Victor Roehm III, “New COVID-19 Relief Bill Includes Targeted Relief for Restaurants and Other Hard-Hit Small Businesses and Nonprofits” (https://www.jdsupra.com/legalnews/new-covid-19-relief-bill-includes-4432932/)
Peter Romeo, “Restaurants May Have to Wait for $29B in New Federal Aid” (https://www.restaurantbusinessonline.com/financing/restaurants-may-have-wait-29b-new-federal-aid)