The American Rescue Plan Act (“Act”) was passed by the Senate over the weekend and passed by the House today. President Biden is set to sign the Act into law on Friday, March 12th. The Act has $1.9 Trillion in relief funds with $28.6 Billion set aside for the restaurant industry in the Restaurant Revitalization Fund (“Fund”). The Fund has apportioned funds into two funding groups; $5 Billion for restaurants with annual gross revenue under $500,000 and $23.6 Billion for restaurants over $500,000 in annual gross revenue.
Differences from the Paycheck Protection Program (“PPP”)
This is a grant program with no loan documents or forgiveness applications. Instead, each restaurant entity can apply for and receive up to $10M in grant funds through the Act. The amount a restaurant receives is based on the sum of the restaurant’s gross revenue in 2019 minus the gross revenue in 2020 minus PPP and EIDL money received. For example, Restaurant A made $7M gross revenue in 2019, made $3M gross revenue in 2020 and received $1M in PPP and EIDL combined. ($7M - $3M -$1M =$3M) The restaurant will receive $3M in grant funds directly from the SBA (as long as funds are available).