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Update-Restaurant Revitalization Fund Client Alert

By Bernkopf Goodman on 04.29.2021
Posted In: Client Alerts, COVID-19

On April 1, 2021, we sent out a Client Alert about the American Rescue Act of 2021 which established a Restaurant Revitalization Fund, specifically targeting restaurants and bars with grants (not loans). As of the date of our initial Client Alert, there was little information on how this fund would be administered by the SBA. Additional information on the fund is now available on the SBA website. Applicants can even sign up on the SBA website to get e-mail alerts as more information becomes available.

WHO CAN APPLY
As mentioned in our earlier Client Alert, during the first 21 days of the fund being open, the Administrator shall prioritize awarding grants to eligible entities that are small business concerns owned and controlled by women, veterans, or socially and economically disadvantaged small business concerns.

Eligible business types:
Restaurants
Food stands, food trucks, food carts
Caterers
Bars, saloons, lounges, taverns
Snack and nonalcoholic beverage bars
Bakeries (onsite sales to the public comprise at least 33% of gross receipts)
Brewpubs, tasting rooms, taprooms (onsite sales to the public comprise at least 33% of gross receipts)
Breweries and/or microbreweries (onsite sales to the public comprise at least 33% of gross receipts)
Wineries and distilleries (onsite sales to the public comprise at least 33% of gross receipts)
Inns (onsite sales of food and beverage to the public comprise at least 33% of gross receipts)
Licensed facilities or premises of a beverage alcohol producer where the public may taste, sample, or purchase products
The SBA will take in ALL applications on day 1 of the program but will only process “priority” applications within the first 21 days.

HOW TO APPLY
The SBA has set up webinars to assist applicants with the process. Restaurants can apply directly through point-of-sale providers Clover, NCR Corp., Square, and Toast or directly through the SBA website. It initially appeared that the Applicants would need a Data Universal Numbering System (DUNS) number and be registered with the System for Award Management (SAM). The SBA has confirmed that that will NOT be the case. Applicants will, however, need the following documentation:

Verification for Tax Information: IRS Form 4506-T, completed and signed by Applicant. Completion of this form digitally on the SBA platform will satisfy this requirement.
Gross Receipts Documentation: Any of the following documents demonstrating gross receipts and, if applicable, eligible expense

Business tax returns (IRS Form 1120 or IRS 1120-S)
IRS Forms 1040 Schedule C; IRS Forms 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
Point of sale report(s), including IRS Form 1099-K

For applicants that are a brewpub, tasting room, taproom, brewery, winery, distillery, or bakery:

Documents evidencing that onsite sales to the public comprise at least 33.00% of gross receipts for 2019, which may include Tax and Trade Bureau (TTB) Forms 5130.9 or TTB. For businesses that opened in 2020, the Applicant’s original business model should have contemplated at least 33.00% of gross receipts in onsite sales to the public.

For applicants that are an inn:

Documents evidencing that onsite sales of food and beverage to the public comprise at least 33.00% of gross receipts for 2019. For businesses that opened in 2020, the Applicant’s original business model should have contemplated at least 33.00% of gross receipts in onsite sales to the public.

HOW TO CALCULATE THE AMOUNT

Payment calculations
Calculation 1: for applicants in operation prior to or on January 1, 2019:

2019 gross receipts minus 2020 gross receipts minus PPP loan amounts

Calculation 2: for applicants that began operations partially through 2019:

(Average 2019 monthly gross receipts x 12) minus 2020 gross receipts minus PPP loan amounts

Calculation 3: for applicants that began operations on or between January 1, 2020, and March 10, 2021, and applicants not yet opened but have incurred eligible expenses:

Amount spent on eligible expenses between February 15, 2020, and March 11, 2021 minus 2020 gross receipts minus 2021 gross receipts (through March 11, 2021) minus PPP loan amounts
Recipients are not required to repay the funds as long as the funds are used for eligible uses no later than March 11, 2023.

The SBA has published a Sample Application here. It is important to have your application ready on the day the fund opens because the relief will go quickly.

For more information, go directly to the SBA website.

COVID-19 Response Team