Don’t Leave Money on the Table: Apply Now for The Restaurant Revitalization Fund
The following information is derived from our affiliate company, Alloy Silverstein.
The American Rescue Plan Act set aside $28.6 billion in grants to aid struggling restaurants and other food and beverage businesses amidst the COVID-19 pandemic. Abacus Payroll’s affiliate CPA firm, Alloy Silverstein, can help restaurant business owners complete their application for best chances to secure grant funds. The funds are on a first come, first served basis, so timing is very important. See below our summary on the SBA’s Restaurant Revitalization Fund grant program
Click here to skip to application information.
What is the Restaurant Revitalization Fund (RRF)?
$23.6 billion has been made available for the SBA to award loans capped at $10 million to food and beverage industry business owners. An additional $5 billion is set aside for smaller businesses with gross receipts of $500,000 or less.
Restaurant applicants can apply directly through the SBA for up to $5 million per location (capped at $10 million total) in grants, with a minimum award of $1,000. The funds must be spent on eligible expenses incurred between February 15, 2020 and March 11, 2023. Any remaining funds at the end of the covered period must be returned to the Treasury. If a business that receives grant funds permanently closes before March 11, 2023, the covered period will end when the business permanently closes. The RRF grants are not subject to income taxes and federal tax deductions are protected
Who is Eligible for the Restaurant Revitalization Fund?
Eligible businesses that can apply for The Restaurant Revitalization Fund include a place of business where patrons assemble for the primary purpose of being served food or drink. The business must have had at least 33% gross receipts be onsite food and beverage sales in 2019. The applicant must own or operate 20 or fewer establishments and certify economic necessity.
This covers:
- Restaurants
- Caterers
- Food stands, food trucks, food carts
- Bars, saloons, lounges, taverns
- Snack and nonalcoholic beverage bars**
- Bakeries**
- Brewpubs, tasting rooms, taprooms**
- Breweries and/or microbreweries**
- Wineries and distilleries**
- Inns**
- Licensed facilities or premises of a beverage alcohol producer where the public may taste, sample, or purchase products
- Other similar places of business in which the public or patrons assemble for the primary purpose of being served food or drink
- An applicable franchise as long as they are listed in the SBA Franchise Directory
**Onsite sales to the public comprise at least 33% of gross receipts. The other businesses listed are presumed to exceed 33% of onsite food and beverage sales.
Applicants must be one of the following forms of organization:
- C-Corporations
- S-Corporations
- Partnerships
- Limited Liability Companies
- Sole Proprietors
- Self-Employed Individuals
- Independent Contractors
- Tribal Businesses
- LLC taxed as S-Corporations, or Sole Proprietors
Ineligible food and beverage businesses include publicly-traded companies, a state or local government-operated business, nonprofits, an entity with more than 20 locations, and if they have a pending application or received funds from the Shuttered Venue Operators Grant. Note that entity re-organization for purposes of qualification for the 21-day priority period will result in automatic disqualification.
All applicants must certify that current economic uncertainty makes the funding request necessary to support ongoing or anticipated operations.
What are the Qualified Expenses for Restaurant Revitalization Fund Grants?
The grant can be used on covered expenses incurred between February 15, 2020 and March 11, 2023. The list of eligible expenses are as follows:
- Payroll
- Mortgage Principal or Interest
- Rent
- Utilities
- Operational Expenses
- Normal Food & Beverage Inventory
- Paid Sick Leave
- Maintenance including Construction for Outdoor Seating, Walls, Floods, Deck Surfaces, Furniture, Fixtures, and Equipment
- Supplies such as PPE and Cleaning Materials
- Certain Covered Supplier Costs
- Other Essential Expenses
Accurate and organized recordkeeping of your restaurant’s expenses during the applicable time period is very important.
How Do You Calculate Your Restaurant Revitalization Fund Grant Amount?
For a restaurant that was open prior to the pandemic and remained open throughout, the grant can be calculated as:
Primary RRF Calculation
- Restaurant Gross Receipts in 2019
- Less: Restaurant Gross Receipts in 2020
- Less: Amount of Any 1st or 2nd Draw PPP Loans
- Equals Amount of Grant
* What if there is no 2019 base to compare? The calculation slightly varies for restaurants that opened for business in 2020 or 2021.
Restaurant started 1/1/20 through 3/10/21
- Restaurant expenses incurred 1/1/20 through 2021 to open and operate
- Less: Restaurant Gross Receipts in this period
- Less: Amount of Any 1st or 2nd Draw PPP Loans
- Equals Amount of Grant
Restaurant not opened prior to date of grant application
- Restaurant expenses incurred to open new restaurant through 3/11/2021
- Less: Amount of Any 1st or 2nd Draw PPP Loans
- Equals Amount of Grant
Can You Combine the Restaurant Revitalization Fund with Other Relief Programs?
If you have already applied for and received PPP funds, that amount is subtracted from gross receipts to arrive at your loan amount. See below for the full calculation. However, you cannot apply for PPP after you receive a RRF grant.
One of the main points of eligibility is that you cannot receive both an RRF grant and a Shuttered Venue Operator Grant (SVOG). The SVOG is $1.25 billion in grants for live event venues, theaters, performing arts, museums, zoos, aquariums, talent representatives, and more entities that meet specific eligibility requirements.
Your best course of action is to consult with your CPA or business advisor to know all available relief programs and which is the best for your individual situation.
What Does the SBA Application Process Look Like?
View Our In-depth Video on the Restaurant Revitalization Fund Updates and Application Tips
Registration for an account for the Restaurant Revitalization Fund will begin nationwide at 9:00am EST on Friday, April 30, 2021. You must register before applying.
- If you use a SBA partner Point-of-Sale vendor including Square, Toast, NCR, or Clover, you will be able to register with them. The SBA will keep an online list of applicable POS partners.
- If you do not use one of the above apps, register at http://restaurants.sba.gov.
The application portal will open nationwide on Monday, May 3, 2021 at 12:00pm EST. The application will remain open until all $28.6 billion in funding has been secured. The first 21 days of the application opening are reserved for socially or economically disadvantaged businesses and those owned and operated by women and veterans. However, every eligible business is to apply on Monday, May 3 regardless of this exclusivity period. Following the 21-day exclusivity period, the rest of the applications will be processed on a first-come, first-served basis.
What Documents Do You Need for the Application?
- SBA Form 3172 Application. You may access the paper copy of this application now to review or may complete it digitally when the application opens. Note that the online application is significantly more user-friendly than the paper version and will provide prompts to fill in the necessary information as well as auto-fill capabilities.
- IRS Form 4506-T. This signed form will allow the SBA to review your tax transcripts. The information on this form must match your tax returns.
- Gross Receipts backup. This list varies depending on the grant calculation that applies to your business and situation. Consult with your CPA on exactly which backup information you will need. Documents may include:
- 2019 and/or 2020 Business tax returns (IRS Form 1120 or IRS Form 1120-S);
- IRS Form 1040 Schedule C; IRS Form 1040 Schedule F;
- For a partnership: partnership’s IRS Form 1065 (including K-1s);
- Bank statements;
- Externally or internally prepared financial statements such as Income Statements or Profit and Loss statements;
- 2020 Point of sale report(s), including IRS Form 1099-K;
- CPA Comfort Letter and/or 941 payroll returns for a new business;
- Proof of 33% of gross receipts in onsite sales to the public
Some documents may speed up the process while others could take the SBA up to two weeks to review.
Tips for a Successful Application
The SBA advises applicants to consult with their CPA and accounting professionals for the best chance at a complete and well-documented application. It is important to prepare ahead of time as an incomplete application or missing documentation will cause your RRF application to be rejected. If you have to restart the application in that case, the process resets to the beginning. Since funds are first come, first served, this puts your chance of receiving the grant at risk. If you are in process of applying for PPP funds, you must complete the PPP application prior to the RRF application.
Contact Us
Make sure you are in constant communication with your CPA. They should know the ins and outs of your business and the complexities of these SBA relief program options. Sign up to view our in-depth video on the full application process at http://bit.ly/alloyRRFapp.
Abacus Payroll, Inc. and Alloy Silverstein Accountants are here to help if you need further guidance in obtaining relief for your small business. For direct assistance, even over the weekend, please call Angela Venti at 856-685-6728 or email solutions@alloysilverstein.com.
Further Reading:
- Always on the Menu: Restaurant Payroll Challenges
- Restaurant Payroll: Tips on Reporting Tips
- Abacus Payroll’s Tip Tax Calculator
- Winery given time to “breathe” with Abacus Payroll taking care of back office operations
