Coffee shops based in the United States are about to be granted access to the largest financial program ever created that targets the restaurant and foodservice sector.
When Congress passed the $1.9 trillion American Rescue Plan in early March, the stimulus included a whopping $28.6 billion allocated to the Restaurant Revitalization Fund (RRF), the first pandemic-related aid specifically for the restaurant industry.
Let’s break down what we know so far:
- Who qualifies for relief
- How the cash grants work
- How much is being offered per coffee shop
- How to apply
Which Coffee Shops Qualify for Relief Funds
If you meet these requirements, you are eligible to apply for relief funds:
- You generated fewer gross sales in 2020 than you did in 2019 due to the pandemic
- Your business’s primary purpose is to serve food or drink
- You do not operate more than 20 locations
- Your business is not publicly traded
If you accepted a PPP loan, the amount of that loan counts as revenue for the sake of the RRF calculation. For example, if you generated $20,000 fewer sales in 2020 than 2019, but you were offered a $21,000 loan, you do not qualify for a Restaurant Revitalization Fund grant,
How the Restaurant Revitalization Fund Grants Work
Grants are one-time distributions to eligible cafes and coffee shops via the Small Business Administration (SBA). This is not a loan like the PPP that required either forgiveness or repayment. These are full-on grants.
According to the act, there are a wide variety of “eligible expenses” you can put that money toward:
- (A) Payroll costs.
- (B) Payments of principal or interest on any mortgage obligation (which shall not include any prepayment of principal on a mortgage obligation).
- (C) Rent payments, including rent under a lease agreement (which shall not include any prepayment of rent).
- (D) Utilities.
- (E) Maintenance expenses, including—
- (i) construction to accommodate outdoor seating; and
- (ii) walls, floors, deck surfaces, furniture, fixtures, and equipment.
- (F) Supplies, including protective equipment and cleaning materials.
- (G) Food and beverage expenses that are within the scope of the normal business practice of the eligible entity before the covered period.
- (H) Covered supplier costs, as defined in section 7A(a) of the Small Business Act (as redesignated, transferred, and amended by section 304(b) of the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (Public Law 116–260)).
- (I) Operational expenses.
- (J) Paid sick leave.
- (K) Any other expenses that the Administrator (SBA) determines to be essential to maintaining the eligible entity.
Recipients are not required to repay the funding as long as funds are used for eligible uses no later than March 11, 2023.
How Much Money Can be Granted
The size of grant you qualify for is determined by the amount your gross sales decreased in 2020 compared to 2019, minus the amount of PPP loans you were issued. It looks like this:
2019 Gross Sales – 2020 Gross Sales – PPP Loan = Grant Amount
For example, let’s say you’re a one-location cafe that generated $350,000 in gross sales in 2019. Due to the pandemic, you only made it to $225,000 in gross sales for 2020. You also received a PPP loan of $50,000. That means, under the current rules, you’re eligible for a $75,000 grant.
Grants are capped at $10 million per recipient.
How to learn more and submit your application
The SBA’s website includes the most up to date and detailed information about the program. Applications are submitted through the SBA’s application portal, which is live and receiving applications now. Be prepared to submit paperwork that demonstrates a loss in gross revenue comparing 2020 and 2019.
You can learn more by watching one of the pre-recorded webinar videos on their Youtube channel.
For additional assistance preparing your application, you can access the following:
- RRF knowledge base support documentation
- Call center support: 1-844-279-8898
- Your local SBA District Office
We’re grateful that the foodservice industry is finally receiving some much needed aid, and wish you the best in applying and benefitting from RRF.
Looking to use your grant to invest in business growth? Here’s how you can start building out an e-commerce store.