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Application Process Announced for Restaurant Revitalization Fund

The U.S Small Business Administration (SBA) released program guidelines and the sample application process for the Restaurant Revitalization Fund (RRF) on April 17, 2021. Applications through the SBA web portal will open on Monday, May 3 at 12:00 PM EDT.

The purpose of the Restaurant Revitalization Fund is to support the restaurant industry by providing funding to those that have suffered significant pandemic related revenue loss.  The RRF also includes specific requirements to ensure equitable distribution to small business concerns owned by women, veterans, and socially and economically disadvantaged individuals.  See our prior article addressing details of the program.

When to Apply:

The Small Business Administration (SBA) announced the launch date for the Restaurant Revitalization Program. Applications through the SBA web portal will open on Monday, May 3 at 12:00 PM EDT.

Applicants can create an account through https://restaurants.sba.gov beginning Friday, April 30 at 9:00 AM EDT.  The access will be limited to creating a user name and password until the official application launch date and time on Monday, May 3 at 12:00 PM EDT.

The application process should mirror how companies processed their PPP Applications.  For example, if one company owns 10 locations through one holding company, and each location filed a separate PPP loan application, the RRF application for each location will need to reference the PPP loan number for that location.   Each location will have a separate RRF application, but the applications will all be managed inside the same user account within the SBA online application portal.

Things to keep in mind and have ready when the application portal opens on May 3:

  • The portal can only accept PDF files smaller than 35MB so if any of your attachments are larger than 35 MB, you need to split those PDF files.
  • The Form 4506-T transcript request will be part of a Docusign application package so there is no need to attach Form 4506-T.
  • Dual factor authentication will be utilized for security purposes.
  • SBA time estimate to complete the application process is 25 minutes.
See below for more information on the application process and documentation required

Previously published on 4/20/2021

Applicant in Good Faith Certifications:

The Applicant must make a good faith certification on SBA Form 3172 that

  • Current economic uncertainty makes this funding request necessary to support the ongoing or anticipated operation of the Applicant.
  • The Applicant does not have a pending application for and has not received a Shuttered Venue Operator grant from the SBA.

Set Asides:

The SBA has set-aside funds that are available only for certain applicants.

1) $5 billion for applicants with 2019 gross receipts of not more than $500,000.

2) An additional $4 billion is set aside for Applicants with 2019 gross receipts from $500,001 to $1,500,000.

3) An additional $500 million is set aside for Applicants with 2019 gross receipts of not more than $50,000

Gross receipts are defined in the guide and the relevant line from the IRS tax form is also specified in the guide (Line 1c for Forms 1065, 1120S and 1120)

How to Apply: 3 Options

  • Through a recognized SBA Restaurant Partner (to be listed on SBA website) or SBA Point-of Sale (POS) Restaurant Partners.
    • The partners haven’t been announced on the SBA Website yet, but best course of action would be to monitor the SBA website as they are actively working to add additional partnerships in the upcoming weeks. Each partner may have their own individual process.
  • Through SBA directly at restaurants.sba.gov.
    • The site requires applicants to set up an account, complete the online application and submit all required documents (See Below). The SBA will take approximately 14 days to review a complete application package.
  • Telephonically at (844) 279-8898
    • This option will require the applicant to complete the application with an agent. The forms are then mailed to applicant for signature and to be returned with required documents. This option could have some delays given the mailing process.

The below information are extracts from the U.S. Small Business Administration.

Documentation Required

1) For all Applicants, the following documentation is required:

  • The application: SBA Form 3172, completed, initialed, and signed. Completion of this form digitally on the SBA Platform will satisfy this requirement.
  • 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 expenses:
  • Business tax returns (IRS Form 1120 or IRS Form 1120-S);
  • IRS Form1040 Schedule C; IRS Form 1040 Schedule F;
  • For a partnership: partnerships 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.

2) For Applicants that are a brewpub, tasting room, taproom, brewery, winery, distillery, or bakery: In addition to the documents in (1) above, documents evidencing that onsite sales to the public comprise at least 33% of gross receipts for These may include 2019 Tax and Trade Bureau (TTB) Forms filed, state or local government forms filed, or internally created reports from inventory management, sales reporting, or accounting software.

For Applicants that are an Inn: In addition to the documents in (1) above, documents evidencing that onsite sales of food and beverage to the public comprise at least 33% of gross receipts for 2019. These may include internally created revenue reports or accounting reports.

The below information are extracts from the U.S. Small Business Administration.

Calculation of Funding Amount

Calculation 1 (Table 1 from Application)for businesses that were in operation (making sales) prior to or on January 1, 2019:

Step 1:  Begin with gross receipts as reported on the eligible entity’s 2019 Federal Tax return.

Step 2:   Subtract Gross Receipts as reported or to be reported on the eligible entity’s 2020 Federal Tax Return or, if applying though a designated SBA POS Partner, the gross receipts that are recorded with the POS partner.

Step 3:   Subtract the aggregate original disbursement amount(s) of any Paycheck Protection Program loan (First draw or Second Draw) received regardless of whether received in 2020 or 2021.  Do not include any amount you repaid on or before May 18th 2020 in accordance with PPP Safe Harbor rules.

Step 4:  If the total is more than $5 million  per physical location, reduce the amount to $5 million per physical location.  Your funding amount, together with your affiliates, may not exceed $10 million. If the total is less than $1,000, you are not eligible.

Applicants that began operations (making sales) partially through 2019

For those entities who began operations partially through 2019, you may elect (at your own discretion) to use either Calculation 2 or Calculation 3 from the funding calculations below:

Calculation 2 (Table 2 from Application):

Step 1 (a): Begin with gross receipts as reported on the eligible entity’s 2019 Federal Tax return.

Step 1 (b): Calculate your 2019 average monthly gross receipts. For example, if you opened your doors on October 15, 2019 (were in operation for 2.5 months) and your total 2019 gross receipts were $25,000: Divide $25,000 by 2.5 for a 2019 average monthly gross receipts calculation of $10,000.

Step 1 (c): Multiply your 2019 average monthly gross receipts (the amount from Step 1(b)) by 12. For example, if your 2019 average monthly gross receipts was $10,000, multiply $10,000 by 12 to result in $120,000.

Step 2: Subtract 2020 gross receipts as reported or to be reported on the eligible entity’s 2020 Federal tax return or, if applying through a designated SBA point-of-sale restaurant partner, the gross receipts that are recorded with the point-of-sale partner.

Step 3: Subtract the aggregate original disbursement amount(s) of any Paycheck Protection Program (PPP) loan (First Draw or Second Draw) received, regardless of whether received in 2020 or 2021. Do not include any amount that you repaid on or before May 18, 2020 in accordance with PPP safe harbor rules.

Step 4:  If the total is more than $5 million per physical location, reduce the amount to $5 million per physical location. Your funding amount, together with your affiliates, may not exceed $10 million. If the total is less than $1,000, you are not eligible.

Calculation 3 (Table 3 from Application): Applicants that began operations (making sales) on or between January 1, 2020 and March 10, 2021; and Applicants that have not yet opened for sales but as of March 11, 2021, have incurred eligible expenses:

Step 1: Start with the total amount you spent on eligible expenses incurred on or between February 15, 2020 and March 11, 2021. Eligible expenses have the same definition as “Eligible Uses of Funds,” below.

Step 2: Subtract 2020 gross receipts as reported or to be reported on the eligible entity’s 2020 Federal tax return or, if applying through a designated SBA point-of-sale restaurant partner, the gross receipts that are recorded with the point-of-sale partner. Do not include any amounts received from any Paycheck Protection Program (PPP) loan (First Draw or Second Draw)

Step 3: Subtract the aggregate original disbursement amount(s) of any Paycheck Protection Program (PPP) loan (First Draw PPP Loan or Second Draw PPP Loan) received, regardless of whether received in 2020 or 2021. Do not include any amount that you repaid on or before May 18, 2020 in accordance with PPP safe harbor rules.

Step 4: If the total is more than $5 million per physical location, reduce the amount to $5 million per physical location. Your funding amount, together with your affiliates, may not exceed $10 million. If the total is less than $1,000, you are not eligible.

Eligible Uses of Funds

  • Payroll costs
  • Payments of principal or interest on any mortgage (not including prepayments)
  • Rent payments (not including pre-paid rent)
  • Utilities
  • Maintenance expenses, including walls, floors, deck surfaces, furniture, fixtures and equipment and construction to accommodate outdoor seating
  • Supplies, including PPE
  • Food and beverage expenses
  • Covered supplier cost
  • Operational expenses
  • Paid sick leave
  • Any other expenses the SBA determines is essential to maintaining the eligible business

The RRF guide issued by the SBA on April 17, 2021 defines and clarifies many of the program and application requirements.  We will monitor the program and update additional guidance as it is released.

Please reach out to your Withum contact for any assistance.

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