You may have heard of the Restaurant Revitalization Fund to help US restaurants that have struggled due to Covid restrictions. But, did you know that wineries, breweries and distilleries are eligible? Yes, wineries, breweries and distilleries are eligible for the RRF. If you have a winery, brewery or distillery that had decreased sales in 2020 you may be eligible for funding. Who’s eligible? How much can you qualify for? Who’s in the priority group? How do you apply? I answer all these questions…keep reading.
What is the Restaurant Revitalization Fund?
The American Rescue Plan Act, also called the Covid Relief Bill 2021, established the Restaurant Revitalization Fund (RRF) to provide funding to help restaurants and other eligible businesses (wineries, breweries, distilleries, bakeries, inns, etc.) keep their doors open. The fund establishes direct payments to qualified businesses up to $10 million and no more than $5 million per location. The funds do not have to be repaid if they are used for eligible uses as laid out in the fund. Submissions for the Restaurant Revitalization Fund open Monday, May 3rd at noon, EST.
As the name implies, restaurants are eligible. But, this is a winery based blog, so I will focus on wineries, breweries and distilleries and how you are eligible for the RRF. First off, it’s important to understand that the idea behind the fund is to help businesses whose sales were hurt by the closure of their public sales location. Wineries, breweries, distilleries, and others, have to have had onsite sales to the public comprise at least 33% of gross receipts in 2019 to be eligible. Basically these are sales to the public through a tasting room, tap house or a licensed facility where the public can taste, sample, or purchase products.
Sales through the Tasting Room
Two things are key here: One – the sales need to go through the tasting room. Two – the sales have to be retail sales direct to the consumer. This goes back to the idea that businesses were hurt by the closure of their public location. So, you have to have a public location to qualify. You also have to be able to show, through documentation, that 33% or more of your gross sales came through this location.
So, what does that mean? It means the sales were:
- to consumers in your tasting room that consumed the product or took the product to consume later, this would include tastings
- placed in your tasting and shipped to the consumer
- placed online and picked up in the tasting room
- for food or beverage
What sales are not eligible? (Ok, here is my qualifier – this information is based on my knowledge up to Friday, April 30th and may change.)
- wine club sales
- sales through a shared tasting room, if you (the winery) sells the wine to the tasting room and then the tasting room sells to the public.
Here again the location is the key. If you are in a shared or group tasting room and the entity that is the tasting room sells direct to consumer, the tasting room entity may be eligible for funding.
How much can you qualify for?
There are different funding calculations based on if you were in business before the start of 2019 or if you started in 2019 or 2020. But, the basic calculation is:
2019 gross receipts minus 2020 gross receipts minus PPP loan amounts
The calculations for other situations are an approximation of the above based on your business start date, so check the guide. There is a minimum funding level of $1,000. And, there is a maximum of $10 million per business and $5 million per location. Business must have 20 or fewer locations to qualify.
What can you do with the funding?
The funding must be used for allowed uses as defined in the fund. These are spelled out explicitly, here are the basics:
- Payroll costs
- Business mortgage or rent
- Business debt
- Operating expenses
- Business supplies (including protective equipment and cleaning materials)
- Business food and beverage expenses (including raw materials)
The funds must be expended by March 2023. Any funds you don’t use for allowed uses have to be returned at that time. But, this is not a loan or a grant, the funds that are used for allowed uses to not have to be returned or paid back.
Am I in the Priority Group?
The SBA has designated the first 21 days for the priority group. This means that they will accept applications from everyone, but the priority group will be processed first. Applications will be processed on a first come, first served basis. The expectation is that this fund will be oversubscribed, ie. more businesses will need the funds than are in the fund. The SBA expects to go back to congress to ask for more money. And, honestly restaurants, wineries, breweries and the like are hurting and need help, probably more than was allocated by congress.
The priority group is for small businesses that are at least 51% owned by one or more individuals who are:
- Women, or
- Veterans, or
- Socially and economically disadvantaged, including LGBTQ
If you are part of the priority group, it is in your best interest to apply quickly.
How do you apply?
There are several ways to apply. You can apply on the SBA website at: https://restaurants.sba.gov. If you use one of the following POS systems, you can use their portal: Square, Toast, Clover, NCR Corporation (Aloha), and Oracle. You can also apply through Lendistry. You will need documentation to support your sales figures, show that you meet the 33% direct to consumer gross sales and show that you meet the priority group requirements. My recommendation is to get all your documentation together and fill out the sample application before you start the application. Yes, you can save your application, but it won’t be accepted until it is complete.
If you have questions on how your winery is eligible for RRF funding, here is the link to the guide, or contact me. Good Luck!
Genevieve has been working with wineries and breweries for more than twenty years as a business consultant. She has an engineering degree, an MBA and is an award winning winemaker. She is also fortunate to work with the NorCal SBDC.