The latest Covid-relief bill – the $1.9 trillion American Rescue Plan Act of 2021 (ARPA) – was signed into law by President Biden, and it provides several provisions specifically beneficial to restaurant owners and to small business owners and individuals in general.
Much of the ARPA extends and expands on the provisions from earlier Covid-relief legislation, including the Families First Coronavirus Relief Act (FFCRA), Coronavirus Aid, Relief and Economic Security (CARES) Act, and the Consolidated Appropriations Act, 2021 (CAA).
As you would expect with bill of this magnitude, the law is very complex, and we will continue to monitor guidance from the Small Business Administration and keep you posted on how the various provisions will impact you. In the meantime, below is a little more about how the ARPA will impact restaurant owners.
Restaurant Revitalization Fund (RRF)
ARPA appropriates $28.6 billion for fiscal year 2021 to struggling restaurants to be administered by the SBA. The money will be available until expended.
Who is eligible?
- Eligible entities include restaurants, caterers, bars, saloon, or other specified food businesses, and includes businesses operating in an airport terminal.
- Restaurant owners with 20 or fewer locations, together with its affiliates as of March 13, 2020.
- Business owners will be required to certify, in good faith, that:
- The uncertainty of the current economic conditions makes it necessary for the grant request to support the ongoing operations of the eligible entity; and
- The eligible entity has not applied for or received a grant under Section 324 of The Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act.
Amount of the grant?
Eligible businesses can receive grants of up to $5 million per physical location, or up to $10 million in total, for affiliated groups. The amount of the grant is computed based on the Covid-related loss in revenue by subtracting 2020 sales from 2019 sales, and reduced by any PPP loans received in 2020 or 2021. The grants will become available 60 days after March 11, 2021, the date ARPA was signed into law by President Biden.
What can the grant funds be used for?
Eligible expenses include:
- Payroll costs;
- Mortgage payments;
- Maintenance expenses;
- Supplies; including personal protective equipment and cleaning supplies
- Food and beverage expenses;
- Covered supplier costs;
- Operational expenses;
- Paid sick leave; and
- Any other expense determined to be essential to maintaining the business.
Nina Daigle, CPA, is a partner with Antares Group, Inc. She can be reached at firstname.lastname@example.org.