You may have heard of the Restaurant Revitalization Fund to help U.S. restaurants that have struggled due to COVID-19 restrictions. But did you know that wineries, breweries, cideries, and distilleries are eligible as well? If your eligible business experienced decreased sales in 2020, you may be eligible for funding.
Who’s eligible? How much can you qualify for? Who’s in the priority group? How do you apply? Keep reading for answers to all of these questions.
What Is the Restaurant Revitalization Fund?
The American Rescue Plan Act, also called the COVID-19 Stimulus Package, established the Restaurant Revitalization Fund (RRF) to provide funding to help restaurants and other eligible businesses (wineries, breweries, distilleries, bakeries, inns, etc.) keep their doors open. The fund establishes direct payments to qualified businesses up to $10 million total and no more than $5 million per location. The funds do not have to be repaid if they are applied toward eligible uses as laid out in the fund.
Submissions for the Restaurant Revitalization Fund opened Monday, May 3rd at 12 p.m. ET.
As the name implies, restaurants are eligible — but wineries, breweries, cideries, and distilleries are also eligible for the RRF. First off, it’s important to understand that the idea behind the fund is to help businesses whose sales were hurt by the closure of their public sales location. Wineries, breweries, distilleries, and others must have had on-site sales to the public comprise at least 33% of gross receipts in 2019 to be eligible. Basically, these are sales to the public through a tasting room, taproom, or a licensed facility where the public can taste, sample, or purchase products.
Sales Through the Tasting Room or Taproom
Two things are key here: One – the sales need to go through the tasting room or taproom. Two – the sales have to be retail sales direct to the consumer. This goes back to the idea that businesses were hurt by the closure of their public location. So, you must have a public location to qualify. You also have to be able to show, through documentation, that 33% or more of your gross sales came through this location.
So, what does that mean? Eligible sales include:
- Product consumed on site or any products purchased to take home
- Orders placed while in your taproom or tasting room that will be shipped later
- Orders placed online and picked up on site
- Food or beverage
What sales are not eligible? (Ok, here is my qualifier — this information is based on my knowledge up to Friday, April 30th and may change.)
- Wine club sales
- Sales through a shared tasting room (if you sell your product to a shared tasting room or taproom and then they sell to the public)
Here again, the location is the key. If you are in a shared or group tasting room and the entity sells direct to the consumer, the tasting room entity may be eligible for funding.
How Much Can You Qualify For?
There are different funding calculations based on whether you were in business before the start of 2019 or, alternatively, in 2019 or 2020. The basic calculation is:
2019 gross receipts minus 2020 gross receipts minus PPP loan amounts
The calculations for other situations are an approximation of the above based on your business start date, so check the guide. There is a minimum funding level of $1,000 and a maximum level of $10 million per business and $5 million per location. Businesses must have 20 or fewer locations to qualify.
What Can You Do With the Funding?
The funding must be applied toward allowed uses as defined in the fund. These are spelled out explicitly in the guide, but here are the basics:
- Payroll costs
- Business mortgage or rent
- Business debt
- Operating expenses
- Business supplies (including protective equipment and cleaning materials)
- Business food and beverage expenses (including raw materials)
The funds must be expended by March 2023. Any funds you don’t spend for allowed uses must be returned at that time. However, this is not a loan or a grant — the funds used properly, as defined by the fund, do not have to be returned or paid back.
Are You in the Priority Group?
The SBA has designated the first 21 days for the priority group. This means that they will accept applications from everyone, but the priority group will be processed first. Applications will be processed on a first-come, first-served basis. The expectation is that this fund will be oversubscribed, i.e. more businesses will need the funds than are in the fund. The SBA expects to go back to Congress to ask for more money. And, honestly, restaurants, wineries, breweries, and the like are hurting and need help — probably more help than was allocated by Congress.
The priority group is for small businesses that are at least 51% owned by one or more individuals who are:
- Women, or
- Veterans, or
- Socially and economically disadvantaged, including LGBTQ
If you are part of the priority group, it is in your best interest to apply quickly.
How Do You Apply?
There are several ways to apply. You can apply on the SBA website at https://restaurants.sba.gov. If you use one of the following POS systems, you can use their portal: Square, Toast, Clover, NCR Corporation (Aloha), and Oracle. You can also apply through Lendistry. You will need documentation to support your sales figures, show that you meet the 33% direct-to-consumer gross sales, and show that you meet the priority group requirements. My recommendation is to get all your documentation together and fill out the sample application before you start the real application. Yes, you can save your application, but it won’t be accepted until it is complete.