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April 26, 2021 
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The SBA is preparing to launch their up to $10 million SBA Grant for Restaurants. This new Restaurant Revitalization Fund will provide financial assistance for restaurant and food and beverage industry businesses that have been impacted by the Covid-19 pandemic.
LINK TO SBA RESTAURANT REVITALIZATION FUND WEBSITE – https://www.sba.gov/funding-programs/…
DISCLAIMER
This video is intended for educational purposes and should not be taken as legal or tax advice. You should consult with your financial professionals about your unique financial situation before acting on anything discussed in these videos. Freedomtax Accounting and Multiservices Inc. is providing educational content to help small business owners become more aware of certain issues and topics, but we cannot give blanket advice to a broad audience. Freedomtax Accounting and Multiservices Inc. or its members cannot be held liable for any use or misuse of this content.
Restaurant Revitalization Fund
The SBA website provides the following information below:
Program details
The American Rescue Plan Act established the Restaurant Revitalization Fund (RRF) to provide funding to help restaurants and other eligible businesses keep their doors open. This program will provide restaurants with funding equal to their pandemic-related revenue loss up to $10 million per business and no more than $5 million per physical location. Recipients are not required to repay the funding as long as funds are used for eligible uses no later than March 11, 2023.
Who can apply for the SBA Restaurant Revitalization Fund
Eligible entities who have experienced pandemic-related revenue loss include:
Restaurants
Food stands, food trucks, food carts
Caterers
Bars, saloons, lounges, taverns
Snack and nonalcoholic beverage bars
Bakeries (onsite sales to the public comprise at least 33% of gross receipts)
Brewpubs, tasting rooms, taprooms (onsite sales to the public comprise at least 33% of gross receipts)
Breweries and/or microbreweries (onsite sales to the public comprise at least 33% of gross receipts)
Wineries and distilleries (onsite sales to the public comprise at least 33% of gross receipts)
Inns (onsite sales of food and beverage to the public comprise at least 33% of gross receipts)
Licensed facilities or premises of a beverage alcohol producer where the public may taste, sample, or purchase products
Additional documentation required:
Verification for Tax Information: IRS Form 4506-T, completed and signed by Applicant. Completion of this form digitally on the SBA platform will satisfy this requirement.
Gross Receipts Documentation: Any of the following documents demonstrating gross receipts and, if applicable, eligible expenses
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
Externally or internally prepared financial statements such as Income Statements or Profit and Loss Statements
Point of sale report(s), including IRS Form 1099-K
For applicants that are a brewpub, tasting room, taproom, brewery, winery, distillery, or bakery:
Documents evidencing that onsite sales to the public comprise at least 33.00% of gross receipts for 2019, which may include Tax and Trade Bureau (TTB) Forms 5130.9 or TTB. For businesses that opened in 2020, the Applicant’s original business model should have contemplated at least 33.00% of gross receipts in onsite sales to the public.
For applicants that are an inn:
Documents evidencing that onsite sales of food and beverage to the public comprise at least 33.00% of gross receipts for 2019. For businesses that opened in 2020, the Applicant’s original business model should have contemplated at least 33.00% of gross receipts in onsite sales to the public.
Allowable use of funds of SBA Grant for Restaurants
Funds may be used for specific expenses including:
Business payroll costs (including sick leave)
Payments on any business mortgage obligation
Business rent payments (note: this does not include prepayment of rent)
Business debt service (both principal and interest; note: this does not include any prepayment of principal or interest)
Business utility payments
Business maintenance expenses
Construction of outdoor seating
Business supplies (including protective equipment and cleaning materials)
Business Food and beverage expenses (including raw materials)
Covered supplier costs
Business operating expenses
Transcript
The good news for restaurant owners the SBA is preparing to launch a new grant program designed for the food industry so that you can get the available funding and financial help to get you through this coronavirus pandemic that’s what we’re going to talk about in this video. Hello from Freedom Tax Accounting or an accounting firm, where we have been providing quality tax and accounting services now over April 26 and we always emphasize the date on the recording on any video relating to these SBA programs because these programs like the EIDL, the PPP, the shuttered venue program and now the new restaurant revitalization fund they all have been constantly changing. So, there may be things that we discussed in this video that can change as soon as tomorrow. So, that’s the importance of subscribing to our channel where you’re always up to date with the most current and accurate information relating to these SBA federal funding programs okay.
So, basically, the SBA has announced that they are ready and they are preparing to launch pretty soon what they are calling the Restaurant Revitalization Fund okay. Now, this is the official SBA landing page for the program. Everything you need to know about this program is in this landing page where we are going to provide a link to this page on the description of this video, so you have access to it, so you can look at it, read it over and you have everything you need to apply for these funds on this website. The SBA has done a very good job of providing all this information right on their website. But we are going to discuss the highlights of this fund, and especially how much money are you able to get and how to apply for it okay.
So, an important thing to note that at this time April 26 there is no way to apply for these grants yet okay. The SBA has said that they are preparing to launch soon. It is our guess here at freedom tax that this will open at some point in May 2021. But you need to start to prepare now because they are going to ask for specific documentation to apply for these funds okay. So, that’s what we’re going to talk about in this video.
So, basically, the SBA has announced this new funding program for restaurants and the food service industry okay it’s you can get a lot of funding with this new program as you can read here. Basically, they are providing up to five million dollars in funding per physical location. And if you have a group of restaurants, your group of restaurants can get up to 10 million dollars in financial help okay. The good thing about this funding is that you do not have to pay back the funds, as long as they are used on eligible uses no later than March 11, 2023. The SBA does provide a list of the things you can use the funds for okay and we’re going to discuss them a little bit further on. But the good thing is on this website in this link, they give you a very detailed guide on how the program works. They also provide here in this link a sample of the application so you can download the application so you’re ready to do the official applications once the program is open.
Now, who can apply? So, this is very important. Who can apply for this funding? It’s restaurants, food stands, food trucks, food carts, caterers, bars, saloons, lounges, taverns, snack and non-alcoholic garbage, bars, bakeries, brew, pups, microbreweries, wineries, inns. So, basically, any business that has some kind of food and beverage service is able to apply for this funding now the SBA does provide a list on how you can get these funds if you have received prior financial help. The good thing is if you have received PPP in the past, you are able to get the restaurant fund okay if you are now applying for a shuttered venue operators grant program you are not able to get the restaurant fund. If your business has received an EIDL loan in the past you can also apply for the restaurant fund okay, so that’s good news because a lot of business owners and restaurants got the EIDL loan and got PPP, but you are also able to get this new restaurant fund or grant.
Now how are you going to apply? Basically, there are three ways to apply. Apparently, the SBA has partnered up with a lot of point-of-sale service providers. So, once this program is up contact your POS system provider to check if they are accepting the applications through your POS system. Also, the SBA will provide a link and a portal on their website so you can apply for this funding through the SBA website; very similar to the EIDL loan application process. Now once again, that link is not available yet we feel that it is going to become available at some point in the month of May and you can also apply over the phone with the SBA.
Now the SBA will ask for very specific documentation okay they’re going to make you sign a t IRS transcript verification form. So, they are going to make you sign the 4506 t because they are going to ask for your IRS transcript to make sure that the information you are providing is up to date and correct. They are going to ask for documentation to check your gross sales. They are going to compare 2019 and 2020.
So, tip: If you have not filed your 2020 business tax return, file them as soon as possible okay. So, your business tax return for your restaurant. They are going to ask for 2019 and 2020. They are going to ask for your bank statements. So, start getting your 2019 start getting your 2020 and also your 2021 monthly bank statement start getting them ready. Also, they are going to ask for financial statements such as profit and loss statements okay; that’s what it says here. So, if your accounting is not up to date bring it up to date okay. Make sure that you have your profit and loss your balance sheets up to date for ‘19, ‘20, and whatever has been going on in 2021.
Okay basically also when you can apply once again that this program is still not on it’s still not active, but we do feel that the SBA is going to start this at some point in May, and the funds are limited. So, the sooner you get your application in, the higher probability that you’re going to get these funds. So, you must start preparing now. At least here at Freedom Tax, we have a lot of restaurants that we do they’re accounting for and we are preparing our clients to get ready so once this is open, our clients are the first ones in the program okay.
Now the SBA has said that for the first 21 days of the program they are only going to process applications for restaurants that are owned by women veterans or minorities okay. So, for the first 21 days, the SBA is going to prioritize the restaurants that are owned by women, veterans or socially or economically disadvantaged individuals okay. Then from day 22 onwards, they are going to accept applications for every eligible business that applies for this funding until the funds run out okay.
Now, how much funding can you get? The SBA has said that they have three different formulas that you can use to find out how much you’re going to get and we’re going to give examples of this a little bit further on. But the important thing is that the funds you cannot use for whatever you want. The SBA does have rules on how you can use the funds and this is the list right here: The funds may be used for payroll; for your mortgage; for your rent; for your debt service; for utility payments; for maintenance expenses; for construction of outdoor seating; business supplies; business food and beverage expenses; covered supplier costs; business operating expenses. So, these are the things you can use the funds for now the SBA has said, and if you read the details of this program that. At the end of every year until 2023 you the SBA will ask for financial statements to confirm how you’re using the funds. So, every year the SBA will check how you have been using the funds because if you break the rules, you May have to pay the funds back.
Now one of the most common questions we get is well how much money can I get. So, let’s give you D the SBA does provide three different formulas, okay but we wanted to discuss the two most basic ones okay. Basically, they’re going to check your 2019 gross sales. They’re going to subtract your 2020 gross sales. So, if in 2020 your gross sales were higher than ‘19, you’re no longer eligible. Now this formula applies if your restaurant was open in 2019. If your restaurant was open partially in 2019 for example, let’s say that your restaurant opened in October of 2019. So, you need to take in for your restaurant the sales for October, November, and December of 2019 and come up with your average monthly sales. And then that you multiply by 12, so you annualize your average monthly sales.
So, this is the formula:
2019 gross sales minus your 2020 gross sales, you also subtract the amount of PPP one and PPP2 that you have received and that is the amount of the grant you’re going to get.
If you have not received PPP 1 or PPP2 then basically you don’t count that into the formula okay. So, once again the formula is 2019 gross sales. Minus 2020 gross sales, minus the amount of PPP1 and PPP2 you have received and that is the amount of the grant you’re going to get.
Now the SBA also provides a formula for restaurants that have opened in 2020 okay but we will not discuss that in this video okay. So, let’s show you an example and we took these numbers from one of our accounting clients, basically to give you an example all right. For example, let’s say that this restaurant in 2019 had gross sales of $500,000, in 2020 it had gross sales of $300,000, it had a PPP1 of 15,000 and they got a PPP2 of 20,000. So, you take 2019 minus 2020 minus PPP1, minus PP22 and this restaurant is eligible to get $165,000 in SBA restaurant grant. And remember if they use the funds correctly, they do not have to pay this money back okay.
So, there’s a lot of funding here available, but once again start preparing. Why? There are 28.6 billion dollars allocated to this program. The SBA will accept applications and until the funds run out. So, start getting ready to be one of the first to apply.
Now if you need help with this application, we will provide this as a service here at Freedom Tax okay. So, this is our contact information call 407-502-2400 to schedule your initial consultation because we will examine your case, tell you exactly how much you are eligible to get from this restaurant funding grant, we will tell you what documentation you are going to need to apply. So, if you want us to do this application for you, start contacting us because the sooner you get ready, you have everything ready for when the SBA opens up the door. Once again SBA has still not announced an exact date when this application process will start. We feel that it will be sometime in May of 2021. So, you have a short period of time right now to start getting prepared. So, contact us if you need help with this application if you need help with your bookkeeping if you need help with your accounting if you need help with your business taxes if you need help with your personal taxes. We are a full-service tax and accounting firm which we can help your business and your personal tax return as well.
Thank you for watching this video. Remember, it is tax season, and we are a full-service accounting firm. We are authorized by the federal government to prepare personal tax returns and business tax returns for individuals and businesses that are located in any of the 50 US states.
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