A Seat at the Table: Restaurants to Receive Long-Awaited Stimulus Funds under the American Rescue Plan: Affiliation Overview

[co-author: Perry Laub]

The restaurant industry has been among the hardest hit by the COVID-19 pandemic. The National Restaurant Association reported in its 2021 State of the Restaurant Industry that, as of December 1, 2020, more than 110,000 eating and drinking places had closed for business either temporarily or permanently since the pandemic’s start. i Industry-wide, restaurants saw a decline of $240 billion in total 2020 sales relative to pre-COVID-19 pandemic forecasts and a decline in nearly 2.5 million jobs from pre-COVID-19 pandemic levels.

On March 11, 2021, President Biden signed the American Rescue Plan Act (the “ARPA”) into law. Section 5003 (Support for Restaurants) of the ARPA appropriates $28.6 billion for a new Restaurant Revitalization Fund from which the Small Business Administration (the “SBA”) will oversee grants to eligible food service providers. This program is aimed at providing critical additional support to the nation’s restaurants and other food service providers to give them a chance to survive the remainder of the pandemic. The program targets small businesses: eligibility and grant amounts are limited based upon the number of locations of the applicant and its “affiliated businesses”. This alert focuses only on how the SBA determines affiliation and number of locations, which differ from other programs. For other aspects of the program please see the SBA’s Restaurant Revitalization Fund website, the SBA’s webinar briefing of the program and the SBA’s Restaurant Revitalization Fund Knowledge Base (the “Knowledge Base”).

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