Restaurant Revitalization Fund – Updated 4/20/21
Further details on the Restaurant Revitalization Fund (RRF) were released by the SBA late last week. Details regarding application requirements, eligibility, and a program guide were all included in this announcement. A sample application for the RRF can be found here.
Over the next two weeks and before the application launch, the SBA is initiating a 7-day pilot period for the RRF application portal. Selections for the pilot period will be made at random and the participants will be from existing borrowers of PPP funds in priority groups. The funds requested from these early participants will not be made available until the application portal is open to the general public. Also, the SBA is working on an application program interface to allow for the application to be embedded in POS systems such as Toast, Aloha, Clover, and Square. This interface will allow operators to be able to submit applications directly within the POS system.
The SBA is expected to announce the official application launch date soon. Once the application is open to the general public, the first 21 days will be reserve for the priority groups including businesses owned by women, veterans, and socially and economically disadvantaged individuals. Furthermore, there will be funds set aside for various revenue groupings. Currently, there is $5 billion set aside for applicants with 2019 gross receipts of less than $500,000. There is also $500 million set aside in grant money for applicants that had gross receipts less than $50,000. The fund also has set aside $4 billion for applicants that had 2019 gross receipts ranging from $500,000 and $1.5 million.
The National Restaurant Association recently published a Q&A which can be found here to help clarify several questions surrounding the RRF program. Some highlights and further information of additional points of clarification can be found below.
There is a discussion that the RRF covered period will potentially be extended for an additional 14 months, which would allow applicants to have until March 2023 to spend the grant money.
An entity that has permanently closed or has filed for bankruptcy protection (without an approved plan of reorganization) will not be eligible for the RRF grant. Furthermore, the eligibility requirements include demonstrating at least one-third of an entity’s revenue comes from the sale of food or beverages being consumed on-site.
The following documents should be prepared for those entities entitled to RRF grants:
- An application form and the IRS Form 4506-T.
- Applicants in operation before January 1, 2019, must supply gross receipts for both 2019 and 2020
- Applicants in operation through part of 2019 must supply gross receipts for both 2019 and 2020
- Applicants that began operations on or between January 1, 2020, and March 10, 2021, and applicants that have not yet opened as of March 11, 2021, but have incurred eligible expenses, must supply documentation of both gross receipts and eligible expenses for the length of time in operation.
- Gross receipts and eligible expense documentation:
– Business tax returns (IRS Form 1120 or IRS 1120-S)
– IRS Forms 1040 Schedule C; IRS Forms 1040 Schedule F
– IRS Form 1065 (including K-1s)
– Bank statements
– Financial statements such as income statements or profit and loss statements
– Point of sale report(s), including IRS Form 1099-K
We will continue to monitor and provide updates on the RRF grant program as they are made available.