SBA: Here’s everything you need to know about the Restaurant Revitalization Fund

Restaurants were one of the hardest-hit sectors during the wake of the COVID-19 pandemic, with closures and limitations cutting off potential revenue.

The Restaurant Revitalization Fund (RRF) was established under the American Rescue Plan Act to help restaurants and other qualifying businesses stay open. This scheme will compensate restaurants for income losses caused by the epidemic, up to a maximum of $10 million per firm and $5 million per physical location. Recipients are not obligated to reimburse money if they are used for approved purposes before March 11, 2023.

“By our estimates, we've lost $250 billion in revenue from the beginning of the pandemic,” National Restaurant Association Executive Vice President Sean Kennedy said at CO—’s recent Small Business Update event. “From March until January of this year, 110,000 restaurants have been closed. … Our goal has always been an industry-specific solution, and the announcement of the passage of the Restaurant Revitalization Fund is a big step towards that.”

The RRF will distribute $28.6 billion in subsidies to struggling restaurants and bars, with restaurants being able to apply for grants based on income lost. Furthermore, $5 billion would be set aside specifically for enterprises with gross receipts of less than $500,000.

Who can apply?

RRF funds is available to most American restaurants and bars that lost revenue in 2020 compared to 2019. The SBA states that:

·        “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 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.”

Any restaurant or bar that is owned by a state or local government or is part of a publicly traded firm is not eligible to apply. Additionally, operators with more than 20 locations are excluded. You are most likely eligible to apply if you operate a franchise with fewer than 20 sites.

How to apply

According to the SBA website, you can apply through SBA-approved POS providers or directly through the SBA's online application portal. Square, Toast, Clover, NCR Corporation (Aloha), and Oracle are among the participating POS vendors.

You do not need to register on the application portal if you are working with Square or Toast. It is not necessary to register with SAM.gov.

There are no DUNS or CAGE identifiers necessary. You can use the SBA form 3172 sample application to help you prepare your application. This form will be available to fill out online. At this time, please do not submit RRF forms to SBA.

The SBA will conduct a seven-day pilot phase for the RRF application portal, which will be utilized to resolve technical issues prior to the general debut. Participants in the pilot period will be chosen at random from enterprises with PPP loans in RRF priority groups, and they will not receive cash until the application portal is open to the public.

The SBA will activate the application online following the pilot period. The SBA would "prioritize reviewing applications from small enterprises run by women, veterans, and socially and economically disadvantaged individuals" during the first 21 days of applications. All other applications will be examined as they are received after 21 days.

The SBA lists the following steps to apply for this fund:

·        “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:

1)    Business tax returns (IRS Form 1120 or IRS 1120-S)

2)    IRS Forms 1040 Schedule C; IRS Forms 1040 Schedule F

3)    For a partnership: partnership’s IRS Form 1065 (including K-1s)

4)    Bank statements

5)    Externally or internally prepared financial statements such as Income Statements or Profit and Loss Statements

6)    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 who 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 operate as 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 who 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.”

Can I still apply?

Unfortunately, applications are closed.