Eligible establishments may begin the application portal registration process for the SBA’s Restaurant Revitalization Fund (RRF) on Friday, April 30, 2021, at 9 a.m. EDT. RRF applications may be filed beginning on Monday, May 3, 2021, at noon EDT.
The RRF is a $28.6 billion relief program established under the American Rescue Plan Act to bring jobs back and revive the industry by administering funds to the hardest-hit small restaurants.
“Help is here. With the launch of the Restaurant Revitalization Fund, we’re prioritizing funding to the hardest-hit small businesses – irreplaceable gathering places in our neighborhoods and communities that need a lifeline now to get back on their feet,” said SBA Administrator Isabella Casillas Guzman in the SBA’s April 19th press release. “And, thanks to clear directives from Congress, we’re rolling out this program to make sure that these businesses can meet payroll, purchase supplies, and get what they need in place to transition to today’s COVID-restricted marketplace.”
To ensure the equitable distribution of relief, the SBA created a $9.5 billion set-aside, which includes:
- $5 billion for applicants with 2019 gross receipts of not more than $500,000;
- $4 billion is set aside for applicants with 2019 gross receipts from $500,001 to $1,500,000; and
- $500 million for applicants with 2019 gross receipts not more than $50,000.
Potential Awards & Program Terms
Through the RRF, eligible establishments may receive funding up to $5 million per location, not to exceed $10 million total for the applicant and any affiliated businesses (minimum award is $1,000). As long as funds are used for eligible uses and exhausted no later than March 11, 2023, RRF recipients are not required to repay the funding.
Recipients are not permitted to prepay items, such as rent or loan payments; however, they may set the funds aside to pay those amounts when they become due through March 11, 2023. If your funds are not fully spent by December 31, 2021, you will be subject to annual reporting requirements to demonstrate how the funds were spent.
Full program details, including eligibility and allowable uses of funds, are available on the SBA’s RRF webpage and in their RRF Program Guide.
The RRF Portal Registration Process
The SBA will open the registration portal on Friday at 9 a.m. If you use Toast or Square as your point-of-sale system, you will apply through those vendors, so you do not need to register through the SBA’s online portal on Friday. All other establishments should register through the SBA on Friday. Even if you already have another account with the SBA, you will still need to register and create a username and password specific to this program.
The SBA recommends applicants prepare a sample application in advance using SBA Form 3172. Once the portal opens on Monday, applicants may then quickly copy the information over to the formal application.
The RRF Application Process
The SBA will begin accepting applications on Monday, May 3rd at noon. For the first 21 days of the program (May 3, 2021 through May 23, 2021), the SBA will prioritize application reviews for small businesses owned by women, veterans, and socially and economically disadvantaged individuals. After the initial 21-day period, all eligible applications will be funded on a first-come, first-served basis until all funds are exhausted.
The SBA defines socially disadvantaged individuals as “those who have been subjected to racial or ethnic prejudice or cultural bias because of their identity as a member of a group without regard to their individual qualities” and economically disadvantaged individuals as “those socially disadvantaged individuals whose ability to compete in the free enterprise system has been impaired due to diminished capital and credit opportunities as compared to others in the same business area who are not socially disadvantaged.”
The SBA hosted three webinars this week which covered the RRF program and application process. Because the available registration openings were limited for these webinars, the SBA is expected to post recordings on their YouTube channel in the near future.
Before submitting your application, you’ll need to gather all supporting documentation, which will ideally include both tax returns and point-of-sale reports, and have them available to upload with your application.
Calculating Funding Amounts
Determination of your eligible funding amount for your application will be based on gross receipts and when your business was in operation.
If your establishment was in operation prior to or on January 1, 2019, you use 2019 gross receipts, minus 2020 gross receipts, minus original PPP loan amounts (first and second draw) to determine the eligible funding amount for your application.
If your establishment began operations partially through 2019, you may use your average 2019 monthly gross receipts, times 12, minus 2020 gross receipts, minus original PPP loan amounts to determine the eligible funding amount for your application. In addition, you may elect to use the following method at your discretion.
If your establishment began operations on or between January 1, 2020, and March 10, 2021, and incurred eligible expenses, you use the amount you 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 original PPP loan amounts to calculate the eligible funding amount for your application.
For the purposes of calculating the RRF, gross receipts do not include:
- Amounts received from First or Second Draw Paycheck Protection Program (PPP) loans;
- Advances or amounts received from Economic Injury Disaster Loans (EIDLs);
- State and local grants (via CARES Act or otherwise); and
- SBA Section 1112 payments
Contact ARB
If you have questions, contact me today. Visit our COVID-19 Financial Resource and Tax Center for information on related matters.
by Holly Ferguson, CPA
Holly Ferguson joined ARB in 1996 and has been a principal for the firm since 2012. Throughout her career, Holly has provided financial reporting consulting services, assisted with transactional accounting and consulting related to business acquisitions/sales, and analyzed implications and strategic implementation of new accounting standards. As the Practice Leader of ARB’s Accounting & Attest Services Team, she focuses primarily on related services for businesses, manufacturers, credit unions, and nonprofit organizations.
