SBA Releases Early Draft of the Restaurant Revitalization Fund Application|
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At a glance:
- The Main Takeaway: The U.S. Small Business Administration has unveiled an early draft of the Restaurant Revitalization Fund (RRF) application.
- Impact on Your Business: Though the application is not set in stone and could even be delayed in terms of the official roll-out, this draft should give your business an insider’s look at what you need to prepare to take advantage of the RRF grant.
- Next Steps: Contact Aprio for assistance with navigating the details of the application and stay tuned for information about our upcoming webinar series, which will give you an introduction to the process.
The full story:
The U.S. Small Business Administration (SBA) has released an early draft of the Restaurant Revitalization Fund (RRF) application.
Based on our team’s review, the application appears to follow the language in the original legislation, as it works its way through all 13 pages. It certainly provides some insights regarding what liberties were allowed in the legislation that the SBA has taken advantage of.
Understanding the details of the application
The application starts by collecting business entity and ownership information from applicants. Then, it walks through eligibility criteria and collects data on Paycheck Protection Program (PPP) funds that applicants received. The application presents three pages of calculations that applicants should complete based on the time in which they opened their restaurants. The three calculation pages include one page for restaurants that were open prior to January 2019; a second page for applicants that partially began operations through 2019; and finally a calculation page for applicants that began operations between January 1, 2020, and March 10, 2021, and for applicants that have not yet opened but have incurred eligible expenses as of March 11, 2021.
After the calculation pages, the application includes a section that requires applicants to define what expense(s) they will utilize their RRF grant for, followed by a section in which the applicant states whether they are a priority applicant and self-certifies that they meet the requirements of a minority- or woman-owned business (if applicable).
Applicants also will see the required documents they must submit in the RRF grant process. This list includes items like tax returns, point of sale (POS) reports, bank statements and financial statements, which can be internally prepared.
In the second required document section, the SBA defines that brewpubs, tasting rooms, tap rooms, breweries, wineries, distilleries and bakeries have an additional hurdle to meet — they must show evidence that their on-site sales of food and beverages to the public comprised at least 33% of gross receipts in each of the years required for documentation, included in the funding calculation. The National Restaurant Association alluded to this language in a recent FAQ publication (linked here), which we believe will be updated and rereleased shortly.
The third required documents section imposes the same hurdle for applicants categorized as “an inn;” these businesses also will have to prove that at least 33% of the gross receipts for each of the years required for documentation were comprised of food and beverage sales to the public.
The last significant section of the RRF application is a series of self-certifications that all applicants must make. The second item on the certification list relates to current economic uncertainty. The form’s instructions don’t provide any additional clarity around what fits under this certification.
The third certification alludes to a new piece of information, as well. This certification defines the covered periods for the applicable expenditures to be made as of February 15, 2020, through March 11, 2023.
There are several other certifications that all applicants will be required to make that are in line with the legislation as we previously understood it.
The bottom line
The release of this draft application is significant because it’s the first piece of information that has come from the SBA since the passage of the RRF legislation. The application states that it’s not the final draft, and we agree that it seems somewhat incomplete, especially as it relates to the instruction portion of the application.
In addition, the release also brings restaurateurs one step closer to the much-needed RRF grants, but after a few hiccups related to the Shuttered Venue Operators Grant (SVOG) roll-out this past week, we expect some delay in the roll-out of these grants, as well.
Contact our Aprio team for more information on the application draft. And in the meantime, please stay tuned for our upcoming webinar series, which will guide you through the application rules and documentation requirements so your business can make the most of the RRF grant.