Written by Anna Nagornaia – Associate, Wendel Rosen’s Business Practice Group
The Restaurant Revitalization Fund (RRF) was created to provide direct relief to restaurants and other foodservice venues affected by the COVID-19 pandemic. As the Small Business Association (SBA) has yet to release the RRF applications, we encourage restaurant owners to continue monitoring the SBA website for news and updates on the RRF grants and the application process.
In the meantime, the National Restaurant Association (Association) has issued updated FAQs on the RRF Grant Program. The Association provides the latest information about how the RRF grant process might work, as well as new developments on eligibility. The FAQs can help you prepare for the RRF Application process, and we encourage all restaurant owners to review them.
New Covered Period?
The RRF covered period might be extended by an additional 14 months, which would mean applicants that received an RRF grant could be given until March 2023 to spend the money.
According to the Association, restaurants and other foodservice entities that have permanently closed or those that are operating under bankruptcy protection (without an approved plan of reorganization) will not be eligible for the RRF grant.
We know that bakeries, breweries, brewpubs, distilleries, taprooms, wineries and inns may apply for a RRF grant. In order to be eligible for the grant, those foodservice entities will have to show that at least a third of their revenues come from the sale of food and beverages consumed onsite.
Restaurants and other foodservice entities that are entitled to RRF grants should prepare the following documents:
- An application form and the IRS Form 4506-T, as well as gross receipts documentation.
- Applicants in operation before January 1, 2019 must supply gross receipts for 2019 and 2020
- Applicants in operation through part of 2019 must supply gross receipts for 2019 and 2020
- Applicants that began operations on or between January 1, 2020 and March 10, 2021 and applicants that have not yet opened as of March 11, 2021, but have incurred eligible expenses, must supply documentation of gross receipts and eligible expenses for the length of time in operation.
The documents to show gross receipts and eligible expenses, include:
- Business tax returns (IRS Form 1120 or IRS 1120-S)
- IRS Forms 1040 Schedule C; IRS Forms 1040 Schedule F
- For a partnership: partnership’s IRS Form 1065 (including K-1s)
- Bank statements
- Financial statements such as Income Statements or Profit and Loss Statements
- Point of sale report(s), including IRS Form 1099-K
The Application Process?
On March 30, 2021 the SBA clarified that, in order to streamline and simplify the application process, the RRF applicants will not be required to apply for a SAM (System for Award Management) number. The SBA stated that it plans to award RRF grants in the order in which applications are received.
We will continue to monitor and provide updates on the RRF Grant Program. Should you have questions about the RRF applications, do not hesitate to contact the attorneys in Wendel Rosen’s Food & Beverage Practice Group.