EIDL Loan Increase, Shuttered Venue Operators Grant, Restaurant Revitalization Fund Grant Updates
The American Rescue Act, signed into law by President Joe Biden on March 11, provides assistance for struggling venue operators, restaurants, and bars that have been especially hard-hit by the COVID-19 Pandemic. The American Rescue Plan Act of 2021 is a $1.9 trillion stimulus bill that includes $28.6 billion for a Restaurant Revitalization Fund (RRF) among many other provisions.
Shuttered Venue Operators Grant
The Shuttered Venue Operators Grant (SVOG) includes over $16 billion in grants to shuttered venues. The program is scheduled to open on April 8, 2021. Entities eligible for the grant include:
- Live venue operators or promoters
- Theatrical producers
- Live performing arts organization operators
- Relevant museum operators, zoos, and aquariums that meet specific criteria
- Motion picture theater operators
- Talent representatives
- Each business entity owned by an eligible entity that also meets the eligibility requirements
Eligible applicants may qualify for grants equal to 45% of their gross earned revenue, with the maximum amount available for a single grant award of $10 million. $2 billion is reserved for eligible applications with up to 50 full-time employees.
The Shuttered Venue Operators Grant program was established by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, and amended by the American Rescue Plan Act.
Restaurant Revitalization Fund grant program
The SBA plans to open applications for the Restaurant Revitalization Fund (RRF) grant program within 30 days. The program allows restaurants to apply for grants of up to $10 million based on lost revenue, with $5 billion set aside for businesses that posted less than $500,000 in 2019 revenue.
The SBA is targeting a phased launch starting in late April 2021. The tax-free grants are for restaurants, bars, and associated food and beverage-related businesses to provide them with compensation for their reduced revenues of 2020. The covered period is scheduled to end on December 31, 2021.
In addition to qualifying as an eligible entity, a business must also show a pandemic-related loss, i.e., reduced gross receipts in 2020 as compared to 2019 (PPP loan proceeds are considered to be revenues for purposes of this calculation). An eligible entity may receive an amount equal to the suffered pandemic loss, but not exceeding up to $10 million for each eligible entity or $5 million per physical business location.
To calculate 2020 revenue loss, subtract 2020 gross receipts from 2019 gross receipts, and reduce by the amount of loans received from either the First Draw or Second Draw PPP loans in 2020 or 2021.
The American Rescue Plan Act authorized and allocated $28.6 billion to the Restaurant Revitalization Fund program.
The term “eligible entity” means a restaurant, food stand, food truck, food cart, caterer, saloon, inn, tavern, bar, lounge, brewpub, tasting room, taproom, licensed facility or premise 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.
EIDL Loan Increase
The Small Business Administration announced it will increase the maximum Economic Injury Disaster Loan (EIDL) loan amount to $500,000 (potentially retroactive for prior EIDL fund recipients) with an extension to 24 months of economic injury. The maximum EIDL was capped at six months’ worth of economic injury and a maximum of $150,000.
Existing SBA disaster loans approved prior to 2020 in regular servicing status as of March 1, 2020, received an automatic deferment of principal and interest payments through December 31, 2020. This initial deferment period was subsequently extended through March 31, 2021. An additional 12-month deferment of principal and interest payments will be automatically granted to these borrowers. Borrowers will resume their regular payment schedule with the payment immediately preceding March 31, 2022.
Stay tuned as we monitor this legislation for potential changes that could impact you. As always, please contact us if you have any questions or would like to talk to one of our COVID-19 Advisory Team members – we’re here to help.