The Restaurant Revitalization Fund (RRF) was part of the American Rescue Plan Act of 2021 and included $28.6 billion of relief targeted to small restaurants with priority given to women, veterans and economically disadvantaged individuals.
The RRF application process was administered by the Small Business Administration (SBA) and many restaurant owners were eagerly following guidance regarding the application process and preparing their documentation in order to submit applications when the application portal opened on May 3, 2021. All SBA guidance encouraged applicants to apply on the first day in anticipation of RRF demand exceeding the funding for the program.
The program included a “set aside” priority period for restaurants owned by women, veterans and economically disadvantaged individuals for the first 21 days of the program. The SBA stopped funding during the priority period due to lawsuits challenging the preferential treatment to the priority groups. There were grants issued to up to 105,000 restaurant operators before the $28.6 billion of funding was depleted. It is unknown whether funds remain undistributed until the legal challenges are resolved.
The SBA notified all applicants that the program will be disabled on July 14th which means that applications will no longer be accepted or handled. They are keeping all of the application information in the application portal in the event that additional funding is approved by Congress (legislation has been introduced to replenish the fund with an additional $60 billion, but the bill has not progressed).
What does this mean for the applicants who didn’t receive funding?
Unfortunately, it is clear that no further RRF grants will be distributed by the SBA without additional funding from Congress. For the restaurants depending on this funding in order to remain open, consideration should be given to other SBA programs available currently including a recently expanded COVID-19 EIDL Loan Program.
We will continue to monitor this program and provide updates when there is new information.
reach out to your Withum contact for any assistance.
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