Restaurant Revitalization Fund: Use of Funds Validation
The American Rescue Plan Act of 2021 established the Restaurant Revitalization Fund (RRF) to provide much needed funding to restaurants and other eligible businesses that suffered revenue losses as a result of the pandemic. RRF proceeds may be used for specific business expenses as follows:
- Payroll costs (including sick leave);
- Payments on any business mortgage obligation;
- Rent payments;
- Debt service;
- Utility payments;
- Maintenance expenses;
- Construction of outdoor seating;
- Supplies, including protective equipment and cleaning materials;
- Food and beverage expenses (including raw materials);
- Covered supplier costs, which is an expenditure made by the eligible entity to a supplier of goods for the supply of goods; and
- Business operating expenses.
Business owners who received RRF monies must use all of these funds by March 11, 2023 on eligible expenses incurred between February 15, 2020 and March 11, 2023. Recipients that are unable to use all RRF funds on eligible expenses by the March 11, 2023 date must return the portion of unused funds to the government.
There are currently important interim reporting deadlines to report these in-progress eligible expenditures. The first deadline is December 31, 2021. By this date, recipients must report through the SBA portal how much of their award has been used against each eligible expense category. If by December 31, 2021, all RRF funds have been fully expended, the applicant will be asked to certify these expenses. For all businesses that have not fully expended their award, this submission must be repeated by December 31, 2022.
We are awaiting further guidance as to the submission process. It is important that you start assembling documentation supporting these eligible expenditures. Proper documentation the SBA may request includes copies of invoices, contracts, canceled checks, and bank statements. Since the initial submission is due no later than December 31, 2021, it is recommended that you create a self-imposed cutoff date that will allow the timely meeting of this deadline. Perhaps this cutoff could be November 15, 2021, or November 30, 2021.
Gettry Marcus is available to assist both our valued clients who we assisted with the initial RRF application process along with any other establishment that wishes to utilize our services. Please contact your account manager, or Andrew P. Ross (extension 246), or Sean Kaplan (extension 228), the authors of this article.