Home / Issues & Advocacy / FAQs Restaurant Revitalization Fund Grant
Step-By-Step Guide Applying for RRF
This resource will guide you through the Restaurant Revitalization Fund application and approval process. It includes links to important information and a checklist of required documents. Download a copy now.
Next Steps Guide to RRF Grants
This Next Steps guide will help plan for once you've received a Restaurant Revitalization Fund grant. It includes a list of documents you should have available and tips on how and when the funds can be spent.
RRF Expense Tracker
This resource will help grantees more easily document their use of funds in specific categories. The budget tool is essential for restaurants, bars, breweries, caterers, distilleries, bakeries, food trucks and other entities to closely monitor RRF eligible expenses. Download a copy now.
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Who is an “eligible entity” for Restaurant Revitalization Fund Grants (RRFG)?
Entities that own a place of business where the public or patrons assemble for the primary purpose of being served food or drink, including a:
*Eligibility may be limited for the following entities:
Bakery; Brewery; Brewpub; Distillery; Microbrewery; Taproom; Tasting Room; Wineries
Inn
What disqualifies an entity from RRFG eligibility?
The following circumstances would preclude an otherwise eligible entity from receiving an RRFG:
When does an eligible entity have to have been established to receive an RRFG?
An entity must have been established to incur eligible expense before March 11, 2021.
If an entity was not open prior to January 1, 2020, it is still eligible for RRFG. Even if an entity has not opened by the date of the application, it can apply for eligible expenses incurred in preparing to open. For entities opened or that were planning to open after January 1, 2020, the grant fund eligibility generally follows a formula is:
[Eligible Expenses Incurred February 15, 2020 to March 11, 2021 ] – [2020 Gross Receipts] – [PPP Loans] = Grant Fund
What is the minimum and/or maximum amount an entity can receive?
The SBA has a minimum grant amount of $1,000 for eligible entities. The maximum grant amount is $5M per location and $10M total for the eligible entity.
Can a nonprofit organization which owns an eligible entity apply for an RRFG?
No. Nonprofits are not eligible fot RRFG.
Is an entity that applied for and received a 1st draw and a 2nd draw Paycheck Protection Program (PPP) loan eligible to apply for an RRFG?
Yes. However, the RRFG will be reduced by the total amount of PPP Loans.
Are franchisees considered eligible entities?
What is the definition of an “affiliated business”?
An “affiliated business” is a business that is itself an eligible entity and has an equity or right to profit distributions of not less than 50% in the RRFG applicant or the contractual authority to control the direction of the RRFG applicant as of March 13, 2020.
Do the SBA “Affiliation Rules” apply?
No. The statute included a definition for “affiliated business,” so the SBA Affiliation Rules found at 13 C.F.R. 121.301 for financial assistance do not apply.
My franchise restaurant is an eligible entity under the RRFG rules but its franchisor is a publicly traded company. Is the entity eligible?
Yes, as long as the RRFG applicant is listed on the SBA Franchise Directory, otherwise qualifies for the RRFG, and the publicly traded company is not an "affiliated business" (i.e., does not have an equity or right to profit distributions of not less than 50% or the contractual authority to control the direction of the business as of March 13, 2020).
What documents might an eligible entity need to prepare to apply for a RRFG?
An application form and the IRS Form 4506-T, as well as gross receipts documentation.
NOTE:
For applicants that are a Bakery, Brewery, Brewpub, Distillery, Microbrewery, Taproom, Tasting Room, Wineries:
In addition to the above documents, further documentation is required to show onsite sales to the public comprise at least 33% of gross receipts for 2019. These may include 2019 Tax and Trade Bureau (TTB) Forms filed, state or local government forms filed, or internally created reports from inventory management, sales reporting, or accounting software.
For applicants that are an Inn:
In addition to the above documents, further documentation is required to show onsite sales to the public comprise at least 33% of gross receipts for 2019. These may include internally created revenue reports or accounting reports.
Do restaurants need to receive a DUNS number and register at www.SAM.gov in order to apply for a RRFG?
No. On March 30, the SBA clarified this in order to streamline and simplify the application process for eligible entities.
Which Point of Sale (POS) vendors are working with the SBA on this program?
Several POS vendors are working with the SBA. Full-service vendors are providing a unique, custom portal for their customers to submit applications that will automate the collection of transaction history to expedite the application process. Applicants submitting via a full-service vendor do NOT need to submit an application via the SBA Portal.
How do I apply?
When the application period opens, there are three ways to apply for a Restaurant Revitalization grant:
Does the SBA provide assistance with applications?
Yes. There is a call center available at 1.844.279.8898 (Hours are Monday-Friday 8am-8pm ET), and local SBA District Offices: Click here to learn more.
As the SBA plans to award grants “in the order in which applications are received,” is that order based on the entities of different sizes based on annual gross receipts? For example, the order in which applications are received based on each level of company size?
Entities that can certify that they meet the definition of a woman-owned, veteran-owned, or socially and economically disadvantaged small business will be given priority for award if their application is filed within the first 21 days the application is open for submissions. SBA will accept applications from all eligible applicants during the first 21 days, but will only distribute funds for approved applications that have self-certified as meeting the eligibility requirements for priority ownership. In addition, $5 billion is set aside for applicants with 2019 gross receipts of up to $500,000. An additional $4 billion is set aside for applicants with 2019 gross receipts from $500,001 to $1,500,000. Lastly, an additional $500 million is set aside for applicants with 2019 gross receipts of up to $50,000.
Will banks, local lenders, or community development financial institutions be involved in RRFG?
No. The RRFG program is administered through the SBA.
How will entities receive a RRFG?
SBA will deposit the funds directly into the bank account identified in the application. However, the SBA requires the disbursement to be placed into the applicant’s commercial business account. Using the SBA automatic linking service will expedite this process. In cases of sole proprietors operating without a commercial account, the SBA will require supporting documentation to demonstrate this account is utilized for restaurant operations, and it is owned by the sole proprietor. SBA will not allow funding accounts with limited (less than 3 months) history or unrelated ownership to the applicant.
Do I have to provide ownership information?
Yes, the application requires disclosure of all owners with 20% or more equity of the applicant.
How much can an eligible entity receive?
An entity can receive a tax-free federal grant equal to the amount of its pandemic-related revenue loss, subtracted by the total amount it received in all PPP loans.
How does the SBA calculate gross receipts?
Gross receipts mean all revenue in whatever form received or accrued from whatever source, including from the sales of products or services, interest, dividends, rents, royalties, fees, or commissions, reduced by returns and allowances. Generally, receipts are considered “total income” (or in the case of a sole proprietorship “gross income”) plus “cost of goods sold” as these terms are defined and reported on IRS tax return forms— this includes Form 1120 for corporations; Form 1120-S for S corporations; Form 1120, Form 1065 or Form 1040 for LLCs; Form 1065 for partnerships; Form 1040, Schedule C for other sole proprietorships.
Receipts do not include net capital gains or losses; taxes collected for and remitted to a taxing authority if included in gross or total income, such as sales or other taxes collected from customers and excluding taxes levied on the concern or its employees; proceeds from transactions between a concern and its domestic or foreign affiliates; and amounts collected for another by a travel agent, real estate agent, advertising agent, conference management service provider, freight forwarder or customs broker.
Subcontractor costs, reimbursements for purchases a contractor makes at a customer’s request, investment income, and employee-based costs such as payroll taxes are not excluded from receipts.
Gross receipts for 2020 do not include any amounts received from any Paycheck Protection Program (PPP) loan, SBA Section 1112 debt relief payments, or from any SBA Economic Injury Disaster Loan (EIDL) loan, EIDL advance, targeted EIDL advance, state and local small business grants (via CARES Act or otherwise).
Are PPP loans, Economic Injury Disaster Loans (EIDL), advance grants from EIDL, SBA Section 1112 debt relief payments, targeted advance grants, and/or state and local small business grants (via CARES Act or otherwise) included within gross receipts for 2020?
It is unlikely these emergency funds will be included in gross receipts calculations for RRFG. The National Restaurant Association is actively seeking to exclude these funds.
If I returned my 1st Draw PPP loan in whole before the applicable safe harbor deadline on May 18, 2020, is it deducted from my eligible grant amount?
No. If an entity returned a PPP loan during the Safe Harbor period, it is not deducted from the RRFG amount.
Is an EIDL deducted from eligible RRFG amounts?
No.
Is an EIDL advance grant or target advance grant deducted from eligible RRFG amounts?
Are COVID-19 Employee Retention Tax Credits (ERTC) taken in 2020 and/or 2021 deducted from eligible RRFG amounts?
No. However, an entity is restricted from collecting ERTC for any “eligible wages” paid with RRFG funds.
How is a small business concern “owned and controlled by women” defined?
An eligible small business concern owned and controlled by veterans must (1) meet the SBA's Size Standard requirements for a small business concern; (2) be at least 51% owned by one or more veterans; and (3) have the management and daily business operations controlled by one or more veterans. The concern must also qualify as small under the SBA Size Standards per the 6-digit NAICS code. Applicants must self-certify eligibility as a small business concern owned and controlled by veterans for priority in awarding the grant.
How is a small business concern “owned and controlled by veterans” defined?
An eligible small business concern owned and controlled by veterans must (1) meet the SBA’s Size Standard requirements for a small business concern; (2) be at least 51% owned by one or more veterans; and (3) have the management and daily business operations controlled by one or more veterans. The concern must also qualify as small under the SBA Size Standards per the 6-digit NAICS code. Eligible applicants might need to self-certify to meet all elements of this definition and follow other criteria established by SBA.
How is a small business concern “owned and controlled by socially and economically disadvantaged individuals” defined?
What are the eligible expenses for RRFG?
Will the SBA require entities to demonstrate how all grant funds were used on eligible expenses?
Yes. By December 31, 2021, recipients must report through the application portal how much of the award has been used against each eligible use category. If the entity fully expends its funds prior to December 31, 2021, it will be asked to certify in the application portal that proceeds have been used on eligible expenses.
Recipients that do not fully expend award funds prior to December 31, 2021 will be required to complete annual reporting submissions until funds are fully expended.
SBA reserves the right to request supplemental documentation needed to validate the certification.
What is the time frame for when these eligible expenses can be—or could have been—incurred?
An eligible entity can use grant funds for eligible expenses incurred from February 15, 2020 until March 11, 2023.
What happens if the entity does not spend all of the grant funds by the end of the covered period?
If an entity cannot use all grant funds or permanently ceases operations on or before March 11, 2023, the entity must return the unused funds to the U.S. Department of Treasury.
Entities who met eligible expenses might have put them on a personal- or business- line of credit—can the entity pay the credit card bill to satisfy the eligible expense? If so, is the interest on this transaction included as an eligible expense?
Yes.
Is the repayment of SBA 7(a) loans, PPP loans or EIDLs an eligible expense?
Will RRFG applicants be made public?
This is uncertain and has not been clarified in federal guidance.
Will RRFG recipients be made public? If so, how long after they accept the funds?
While the American Rescue Plan did not specify a public reporting process or mechanism for grant recipients and/or grant amounts, it is a reasonable expectation that federal grants would be subject to transparency requirements, including the Freedom of Information Act. For example, some PPP loan recipients were originally released by company name and by category of funding in June 2020. Subsequently, a federal court ordered the SBA under the Freedom of Information Act to release all PPP loan recipients by business names and loan amount.
Will the RRFG be taxed as federal gross income?
Grants will not be included as federal taxable gross income by the IRS
Will entities be able to deduct federal tax expenses paid with RRFG funds?
Yes, the law states that “no deduction shall be denied, no tax attribute shall be reduced, and no basis increase shall be denied, by reason of the exclusion from gross income.”
Can a state tax RRFG funds or disallow standard and necessary tax deductions on expenses paid with RRFG funds?
A state may be able to increase an eligible entity’s state tax liability associated with its acceptance of a federal RRFG. It will be important for an entity to be aware of its state’s tax conformity with the federal code and how its state plans to treat the RRFG funds. Many states automatically accept changes to the federal tax code, which protect the tax status of RRFG.
How are different organizations situated for RRFG?
Non-taxable income on the grant is added to the basis for S Corp shareholders and the partner’s basis in a partnership.