Hope Springs Eternal!
“Hope springs eternal in the human breast;
Man never Is, but always To be blest.
The soul, uneasy, and confin'd from home,
Rests and expatiates in a life to come.”
―Alexander Pope, An Essay on Man.
With spring comes hope for new beginnings. The flowers and blossoms come out and the days get longer. And this year, as more and more of us are vaccinated, I'm beginning to feel lighter than I have in over a year. This month we focus on federal funding relief for our local restaurants and our Intellectual Property Basics blog series.
Take good care and get your vaccine! Susan
The Restaurant Revitalization Fund
The $1.9 trillion American Rescue Plan Act of 2021 (Act) that President Biden signed into law on March 11, 2021 includes a new $28.6 billion Restaurant Revitalization Fund (the Fund). The Fund will provide much-needed grants instead of loans to restaurants, bars, food trucks, brewpubs and similar businesses, with the exception of publicly traded companies and/or those businesses (together with any affiliated businesses) with more than 20 locations, regardless of whether those locations do business under the same or multiple names. In other words, the Fund supports small (or small-ish) businesses and sets aside $5 billion for restaurants whose annual revenue is $500,000 or less.
Eligible restaurants can apply for up to $5 million in grants per physical location, not to exceed $10 million per eligibility entity and its affiliated businesses. The amount granted will depend upon the eligible entity's “pandemic-related revenue loss,” which is defined generally as the gross receipts of the eligible entity during 2020 subtracted from the gross receipts of the eligible entity in 2019, if such sum is greater than zero. There are formulas for calculating losses if the eligible entity was not in business during all of 2019. Restaurants that did not operate for all of 2019 and restaurants that did not open until 2020 can also receive support. It's important to note that the eligible entity's pandemic-related revenue losses will be reduced by any PPP or EIDL loan amounts received and already spent.
According to the National Restaurant Association fact sheet, the Fund prioritizes restaurants operated by "marginalized and underrepresented entities, with a focus on women, veterans, and minority-owned and operated eligible entities with annual revenues of less than $1.5 million." Restaurants that meet that criteria will be able to apply in the first two weeks of the program. Funding is also allocated for "outreach to traditionally marginalized and underrepresented communities" and the creation of a resource center.
The Small Business Administration (SBA) will administer the Fund directly, rather than through bank loans guaranteed by the SBA. The allowed uses will be similar to, but not exactly the same, as expenses that result in loan forgiveness under the PPP program. The grants are tax-free to the recipient and they do not reduce tax deductions for expenses paid with grant proceeds. Monitor the SBA's Covid-19 relief options page to learn more as it is announced.
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