What Is Restaurant Revitalization Fund?
- The Small Business Improvement Act
- S-Corp Presidents Toolkit
- POS Applications to the SBA
- A Small Operator Example of a RRF Fund
- The rule of thumb for bakeries and breweries
- RRF grants can be very high
- Non-operating businesses in 2019
- The SBA Grant and Revenue Loss
- The 'Fast and Failover of the New York Times"
The Small Business Improvement Act
The bill is intended to help struggling small- and medium-sized businesses rather than larger chain establishments, but there are limitations based on business size. We will explain the details of the Restaurant Revitalization Grants, who is eligible, and what they can be used for. Unless you are part of a large chain with more than 20 individual locations, most restaurants will not be eligible.
S-Corp Presidents Toolkit
The owner of a sole proprietor the President of an S-Corp should be the person who is authorized to sign a tax return for the business if they are completing the RRF grant application form. The SBA will verify that the individual is authorized to sign the grant application. When applying for a RRF grant, it is a good practice to use a modern browser like Chrome and look for tool tips on each field, and there is a great help resource in the lower right-hand corner of the online application.
POS Applications to the SBA
The SBA has several POS vendors working with them. Vendors are giving their customers a custom portal that will automate the collection of transaction history to speed up the application process. The SBA portal is not the place to submit an application.
If an application is filed within the first 21 days of the application being open, the business will be given priority for the award. During the first 21 days, the SBA will accept applications from all eligible applicants, but only distribute funds for approved applications that have self-certified as meeting eligibility requirements for priority ownership. $5 billion is set aside for applicants with gross receipts of $500,000 or more.
A Small Operator Example of a RRF Fund
The amount of revenue lost from the year to the year is tied to the amount of money that is eligible for. In the third example, a small single location operator is eligible for $50,000 of RRF funds even though the closings in that state were shorter and they were able to take advantage of curbside pickup and meal delivery services. The SBA is working on the application document and the portal for submitting applications is being prepared, but the lender and operator should assemble the information needed to complete the draft application.
The rule of thumb for bakeries and breweries
bakeries and breweries are exceptions to the rule. The SBA outlines that entities must prove that least 1/3 of their gross receipts were from public sales.
RRF grants can be very high
RRF grants can be as high as $10 million for restaurant groups and $5 million for businesses of their own. The intent is for restaurants to recover their losses from the Pandemic. If large, well-heeled restaurants were approved for large sums of money, they would have to lay off staff and close their doors for a while, which is not good for smaller restaurants.
Non-operating businesses in 2019
There are other calculations for businesses that were not in operation for the entire of 2019. The SBA can create their own formula, which could change the calculations. There are requirements for certain businesses.
The public's portion of food and beverage sales must be at least 33% of gross receipts for 2019. Forms 5130.9 or TTB may be accepted. The gross income of the person who receives the grant is not included.
No deduction or basis increase will be denied and no tax attribute will be reduced because of the exclusion from gross income. Any amount that is not income is tax-exempt. Grants will be allocated to partners or shareholders, increasing their basis in their partnership interest, with the grants being treated as tax-exempt income.
The SBA Grant and Revenue Loss
A restaurant, food stand, food cart, caterer, saloon, inn, tavern, bar, lounge, brewpub, tasting room, taproom, licensed or premise of a beverage alcohol producer is eligible. The amount of the grant is the same as the revenue loss of the eligible entity. The grant amount is limited to $5 million per location of the eligible entity.
The revenue loss is calculated by subtracting the 2020 gross receipts of the eligible entity from the 2019 gross receipts of the eligible entity. The SBA Administrator can decide when the covered period begins or ends, or it can be February 15, 2020 or December 31, 2021. Answer:
The 'Fast and Failover of the New York Times"
If the money runs out before the application is considered, restaurants may not be out of luck, according to a federal official.