$28.6 Billion Restaurant Revitalization Fund
DETAILS ABOUT THE RESTAURANT REVITALIZATION FUND
Dear Owners, Clients, and Friends:
Pending the President's signature, the hard-fought, long-anticipated, much-needed $28.6 billion restaurant revitalization fund will be available within weeks. We have been closely following this from its conceptual inception last spring and can finally share some details about what was originally the RESTAURANT's Act.
Some key information:
- This program will be administered by the SBA. Unlike the PPP where applications have been made through banks, applications will be submitted directly to the SBA. Applications should start to be accepted "within weeks, not months" according to congressional leaders.
- Eligible businesses are essentially any place of business where patrons assemble for the primary purpose of being served food or drink with 20 or fewer locations. The maximum grant is $5 million per location and $10 million per affiliated group. $5 billion is earmarked for restaurants with revenue of $500,000 or less. The remaining $20 billion is available for the SBA to administer “in an equitable manner to eligible entities of different sizes based on annual gross receipts.”
- The grant is calculated taking the reduction in revenue 2020 versus 2019 reduced by amounts received in PPP first and second draw. For those not operating the full year 2019 the annualized average revenue is used. For those opening in 2020 revenue loss would be the eligible expenses incurred by the entity minus gross receipts received.
- The Act provides for a 21-day period to prioritize grants to eligible entities that are owned and controlled by women, veterans, or socially and economically disadvantaged small business concerns.
- The grant can be used for payroll, supplier costs, rent, utilities, mortgages, and other operating expenses.
- The money received is tax-free (per section 9673 of the act).
- A business cannot apply for RRF and SVO. It is one or the other.
- Businesses can apply for ERC, PPP, and RRF although each has an effect on the other, especially in terms of how payroll costs can be applied to each of the various programs.
- It is believed that funds will be depleted quickly. It is imperative that owners apply as soon as the program opens. It is not unlikely that the SBA site could be down at times. Early on during the initial round of PPP high volume was causing all kinds of website and application issues. We had staff assigned 24/7 submitting client applications as many times websites would come back up in the early morning hours. You may want to put together a similar plan for when the program opens.
- Have all documentation ready in advance. The SBA will be issuing guidance shortly. We will be compiling all of our client's documents ahead of time so there is no delay in submission.
Please feel free to contact our firm if we can assist with any financial, tax, accounting, bookkeeping, and government program application needs you may have. Dcarpenter@solutionsbychs.com.
We have advised many companies throughout the COVID crisis and hope you find our communications informative.