On Thursday the House passed H.R. 3807, Relief for Restaurants and other Hard Hit Small Businesses Act of 2022, which would add an additional $42 billion to the Restaurant Revitalization Fund (RRF) and fund $18 billion to a newly created Hard Hit Industries Award Program (HHIAP). If passed by the Senate, the bill would ensure funding for more than 177,000 restaurants whose applications were placed on hold when the fund was exhausted in July of 2021.
Who Will Receive Funding?
If the bill were to be passed by the Senate and signed by the president, restaurants that applied for the program before the portal was closed may have the possibility to receive some funding. The initial $28.6 billion in funding was administered on a first come first served basis but this new round of funding would allow the SBA more flexibility to spread out the funds to ensure at least partial funding to all eligible applicants.
If the SBA determines that the additional funding provided is insufficient to make grants in full to every applicant, the SBA can apply three different alternative methods to reduce grant sizes equitably to ensure some type of funding for all applicants.
What If My Grant Gets Denied?
The bill would also give the SBA some flexibility in creating a formal reconsideration process with the SBA for any applicant whose initial application is denied. The bill would also give the SBA the opportunity to reserve funds for denied applicants until their application goes through the reconsideration process.
If an applicant gets denied, the SBA is required to provide a brief explanation identifying the reason why the SBA denied the application with citations to relevant statutory, regulatory or guidance provisions. If the applicant believes their application was incorrectly denied they are allowed an appeal with the SBA which includes submitting additional documentation to support the applicant’s eligibility.
What If My Restaurant Has Since Closed?
To receive funding an applicant must certify that it is either still operating or intends to reopen within 6 months of the certification. This would allow restaurant owners a second chance at reopening their restaurant with the use of RRF grants.
What Is This New HHIAP and Is My Business Eligible?
The HHIAP would be like the RRF but would allow non-restaurant owners that were hard hit by COVID-19 to receive up to $1 million in a tax-free grant. To be eligible for the grant a business owner must show they suffered a pandemic-related revenue loss of 40 percent or greater. The pandemic-related revenue loss is defined as the average annual gross receipts of 2020 or 2021 less the 2019 gross receipts.It is important to note that the HHIAP grant will give priority to entities who experience a pandemic-related revenue loss of at least 80% and second priority to eligible entities that experience a revenue loss of at least 60%.This program would also extend to self-employed individuals.