The Restaurant Act, recently enacted as part of the American Rescue Plan, provides $28.6 billion in grants for the restaurant industry which is struggling to make it through the pandemic. The bill aims to provide grants up to $5 million to individual restaurants and up to $10 million for restaurant groups. Grant process will be managed by the Small Business Administration.
The bill provides that any restaurant, food truck, food cart, caterer, saloon, inn, tavern, bar, lounge, brewpub, tasting room, taproom, licensed facility or premises of a beverage alcohol producer where the public may taste, sample, or purchase products, or other similar place of business in which the public or patrons assemble for the primary purpose of being served food or drink that owns or operates 20 or fewer establishments is eligible to apply for a grant.
The Grant is calculated by subtracting the 2020 revenues of the entity from the 2019 revenue. For those not in operation for the entirety of 2019, the entity can receive the difference between 12 X the average monthly revenue for 2019 and revenue of the eligible entity in 2020 or a formula determined by Treasury. For those not in operation until 2020, the entity can receive a grant equal to the amount of expense incurred by the entity (which would be covered expenses by the grant) minus any revenues received. The grant amount will be reduced by the Paycheck Protection Program (PPP) or Economic Injury Disaster Loan (EIDL) funds spent.
The Treasury is expected to implement the process within 15 days after the enactment.