on Apr 23, 2021
The Restaurant Revitalization Fund: What local economic development stakeholders should know
Written by Erman Eruz
Applications open soon for the $28.6 billion Restaurant Revitalization Fund (RRF), which will provide grants to cover businesses’ pandemic revenue losses. RRF was established by the American Rescue Plan in March, and the Small Business Administration (SBA) released initial guidance on April 17.
Although $28.6 billion is a significant allocation, it falls well short of total restaurant revenue shortfalls over the pandemic, estimated by Congress at $120 billion (the original ask from House Democrats in the HEROES Act last September). Given expected demand, the funds will likely run out before all eligible applications are processed. Congress would then need to determine whether to expand the program to meet demand. For now, SBA is advising businesses to start applying from day one to increase their chances of payment and to demonstrate demand for a possible expansion.
The basic details of the program are as follows:
SBA’s approach to RRF responds to lessons learned from the PPP’s first round, when banks prioritized their customers and larger businesses to the detriment of small, independent businesses in disadvantaged communities. To increase the likelihood of RRF funds going to businesses that need it most:
SBA’s stated goal with the RRF rollout is to provide “as much relief to as many businesses as possible in a short amount of time.” Local economic development stakeholders, such as local government agencies, chambers of commerce, downtown associations, Business Improvement Districts (BIDs), community-based organizations, and others, can play an important role in working with their communities to make sure that the business owners in the greatest need of these funds are aware of the program, begin preparing materials, and are able to apply as soon as possible.
1. According to SBA regulations, socially disadvantaged individuals are those who have been subjected to racial or ethnic prejudice or cultural bias because of their identity as a member of a group without regard to their individual qualities. Individuals who are members of the following groups are presumed to be socially disadvantaged: Black Americans; Hispanic Americans; Native Americans (including Alaska Natives and Native Hawaiians); Asian Pacific Americans; or Subcontinent Asian Americans. Economically disadvantaged individuals are those socially disadvantaged individuals whose ability to compete in the free enterprise system has been impaired due to diminished capital and credit opportunities as compared to others in the same business area who are not socially disadvantaged.↩