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Restaurant Revitalization Fund
March 24, 2021

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Presenters
Terry Moncrief
Partner
tmoncrief@withum.com
(732) 842-3113
Jeremias Ramos
Manager
jramos@withum.com
(212) 829-3248
Kathy Ennis
Partner
kennis@withum.com
(407) 849 1569

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Topics Covered in
Today’s Presentation
 What is the Restaurant
Revitalization Fund?
 Am I eligible for the grant?
 How much money can I receive?
 How do I apply?
 What’s the catch?
Learning Objectives

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Lost Year For Restaurants
 Restaurants have been hit harder than any other industry during the
pandemic
• 110,000 eating and drinking establishments temporarily or permanently closed for
business
• 2.5 million jobs erased
• $240 billion in lost revenue

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Paycheck Protection Program
 Helped thousands of restaurants keep their employees on staff
 Restaurant industry is uniquely different
• Full-service vs Take out
• Higher rents lower payroll cost
• Capacity limits reduced restaurant staffing by 20%
 National Restaurant Association called for targeted relief

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Employee Retention Credit (ERC)
 Originally was created as an “either or” concept with PPP (those that received PPP
funding couldn’t also participate in ERC)
 Consolidated Appropriations Act (December 27, 2020) allows businesses that received
PPP funds to also apply for ERC if they met ERC qualifications. Retroactive for 2020 as well
as extending ERC through June 30, 2021
 American Rescue Plan Act of 2021 (March 11, 2021) extends ERC through December 31,
2021

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What is the
Restaurant
Revitalization Fund?

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Restaurant Revitalization Fund
 American Rescue Plan created a $28.6 billion fund
 Grant program specifically targets restaurants
• Small restaurants
• Preference towards women/veteran/minority owned
• Excludes large chain restaurants

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How Much Money Can I Receive?
 The grant is equal to your pandemic-related revenue drop
• The government is essentially compensating you for the drop in gross receipts in 2020
compared to 2019.
 Maximum amount for an affiliated group is $5,000,000 per physical
location, not to exceed $10,000,000 in total
 Grant reduced by PPP loans received in 2020 & 2021

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Small
Restaurant
Example
2019 Gross receipts -
$600,000
2020 Gross receipts -
$200,000
$400,000 drop in revenue
Eligible for a $400,000 grant

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Large Restaurant Example
2019
Gross Receipts
•Location A - $10,000,000
•Location B - $5,000,000
•Location C - $9,000,000
2020
Gross Receipts
•Location A - $4,000,000
•Location B - $2,000,000
•Location C - $3,000,000
Location A
 $6 million drop
 $5 million grant
Location B
 $3 million drop
 $3 million grant
Location C
 $6 million drop
 $2 million grant
 Total capped at $10mm

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Restaurant Receiving Grant & PPP
2019 Gross receipts - $600,000
2020 Gross receipts - $200,000
$400,000 drop in revenue
Total of $100,000 PPP1 & PPP2 received
Eligible for a $300,000 grant

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Eligibility
Requirements

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“Eligible
Entity”
Restaurant
Food Stand
Food Truck
Food Cart
Caterer
Inn
Tavern
Bar
Lounge
Brewpub
Tasting Room
Tap Room
Saloon
Brewery/Winery with tasting
or sampling

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Simplified
Eligibility
Business
Public or patrons
assemble
Primary purpose of
being served food
or drink

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Could Make a Case for Eligibility
 Ice cream stand
 Bakery
 Specialized desserts (Chocolatier)
 Farmer’s market
 Deli

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Probably Not Eligible
 Non-Profit Dinner (Gala/networking event)
• Not a business
 Wholesale distribution
• Public doesn’t assemble
 Grocery/Convenience Store
• Food isn’t served

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Not Eligible
 State or local government business
 As of March 13, 2020 owns or operates (together with any affiliated
business) more than 20 locations
• Regardless if business is under the same or multiple names
 Has a pending application for or has received a shuttered venue grant
 Publicly traded company

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Definition of Affiliated Business
 The term ‘‘affiliated business’’ means a business in which an eligible entity
has an equity or right to profit distributions of not less than 50 percent, or
 in which an eligible entity has the contractual authority to control the
direction of the business, provided that such affiliation shall be determined
as of any arrangements or agreements in existence as of March 13, 2020.

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Simplified
Definition
COMMON OWNERSHIP
OF MORE THAN 50%, OR
COMMON
MANAGEMENT

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Who Gets Priority?
 $5 billion (21% of the totals funds) will be set aside for entities with gross
receipts of $500,000 or less within the first 60 days.
 Initial 21 days SBA will prioritize certain businesses owned by:
• Women
• Veterans
• Socially and economically disadvantaged groups

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Eligible
Expenses

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Use of Funds
 An eligible entity that receives a grant may use the grant funds for
allowable expenses
 Covered period for expenses is Feb 15, 2020 – Dec 31, 2021.
 The SBA has the power to extend that period out to 2 years after the date
of enactment (March 2023)
 Entities that close or do not use the funds for allowable expenses must
return the funds.

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Allowable Expenses
• Payroll cost
• Principal or interest on any
mortgage obligation
• Rent
• Utilities
• Maintenance
• Construction to accommodate
outdoor dining
• Supplies
• Food and beverage expenses
• Covered supplier cost
• Operational expenses
• Paid sick leave
• Any other expenses the SBA
determines essential

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Interaction with Other Programs
 Can’t double dip wages with ERC
 Nothing specifically excludes double dipping with PPP but the SBA takes it
off the top
• Amount of grant is reduced by the amount of PPP loans received from round 1 & 2.

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RRF vs PPP
RRF
• Payroll - $100k cap
• Utilities
• Software
• Rent
• Mortgage payments
• Property damage
• Worker protection
PPP
• Payroll - $100k cap
• Utilities
• Software
• Rent
• Mortgage payments
• Property damage
• Worker protection

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RRF vs PPP
RRF
• Maintenance expense
• Food and beverage expenses
• “Operational Expenses”
• Paid sick leave
• Other expenses described by the
SBA
PPP

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RRF vs PPP
RRF
• Doesn’t have to be paid back if
used for allowable expenses
• Deductible expenses and non-
taxable income
• No 60/40 split
PPP
• Doesn’t have to be paid back if
used for allowable expenses
• Deductible expenses and non-
taxable income
• 60/40 split with payroll

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RRF vs ERC
• Payroll & Nonpayroll Cost
• Dollar for dollar grant
• Deductions still deductible and
grant in non-taxable
• Short window to apply with limited
funds
• Certain Payroll Cost
• 2020 50% credit 2021 70% credit
• Reduces expenses
• Funds not limited and longer
statue of limits to go back and
amend 941s

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How to Maximize Benefits
 PPP 1&2 more accessible and more funds available but limited to payroll –
use 60/40 split
 RRF can be a considerable grant but funds are limited - use non-payroll cost
 ERC not dollar for dollar and it reduces expenses – can still be a
considerable source of refunds ($7,000 per employee per qualifying quarter
in 2021) – use first $10k in wages per quarter.

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Maximize
All 3
ERC – government
pays 70% of wages
on first $10,000 per
employee
PPP2 – government
pays wages not for
ERC up to $46,154
per employee
RRF – government
pays for
operational cost

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How to Apply

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Apply Directly With SBA
 Still waiting for the application to open – SBA to issue guidance in next few
weeks
 Government grant not SBA loan – not applying with banks but directly with
SBA
 Women/veteran/minority owned business owners will self-certify to
expedite process in the first 21 days

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What Should I Do to Prepare?
 SBA will prioritize the ability of each applicant to use their existing business
identifiers over requiring other forms or registrations.
 However, National Restaurant Association recommends taking these steps
before the initial application window

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Three Steps to Prepare For RRF
Send Send a SAM notarized letter to the Federal Service Desk (FSD) – this is a
relatively new security procedure.
Register Register with the U.S. Federal Government’s System for Award
Management (SAM) which is free and can take up to two weeks to process.
Sign up
Sign up for a Data Universal Numbering System (DUNS) number which is
free and can take up to two business days to process, from Dun &
Bradstreet (D&B).

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Step 1: DUNS
 A nine-digit unique identifier number for businesses
 DUNS is a standard way to interact with government, trade, and industry
organizations
 https://www.dnb.com/duns-number/get-a-duns.html

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Step 2: Sign Up at SAM.gov
 To sign up, entities must create a login.gov user account and to
access/register for SAM.
 On the My SAM page, select Register New Entity and select your type of
entity.
 If registering in SAM.gov strictly for RRF, select
• “I only want to apply for federal assistance opportunities like grants, loans, and other
financial assistance programs.” in response to the question:
• “Why are you registering this entity to do business with the U.S. government?”

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Step 2: Core Data Section on SAM.gov
 Completing the Core Data section:
• Validate DUNS information
• Enter Business Information such as Tax Identification and create a Marketing Partner
Identification Number (MPIN), which is used to apply in Grants.gov.
• Enter CAGE Code if you already have one (if not, one will be assigned after
registration). CAGE codes are tied to DUNS Numbers and cannot be reused.
• Enter General Information (business types, organization structure).
• Provide Financial Information, such as U.S. bank Electronic Funds Transfer (EFT)
Information for Federal government payment purposes.
• Answer the Executive Compensation questions.
• Answer the Proceedings Details questions.

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Step 2: Point of Contact SAM.gov
 Complete the Points of Contact (POC) section:
• The Electronic Business POC is critical since the government systems, like the CAGE
program, use it to contact the business regarding awards. List someone with direct
knowledge of all registrations.
 Complete Representations and Certifications section:
• Select Yes/No on the Financial Assistance Response page.
 Make sure to Submit after final review. A “Registration Submitted –
Confirmation” message will flash on the screen. If this message does not
appear, the registration has not been successfully submitted.

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Step 3: Notarized Letter
1. Download the Letter Template
• A Single entity uses Template 1: https://sam.gov/sam/transcript/fsd/notarized_templates/SAM_Entity_Administrator_Letter_Template1_Single_Entity.docx
• Multiple entities use Template 2: https://sam.gov/sam/transcript/fsd/notarized_templates/SAM_Entity_Administrator_Letter_Template2_Multiple_Domestic_Entities.docx
2. Complete Letter and Insert Business Letterhead
• If letterhead is not available, enter your entity’s legal business name and physical address at the top of
the letter before printing.
3. Signed Completed Letter in Presence of Notary
• Ensure signatory has business authority and can confirm identity in accordance with the local state’s
notary procedures.
4. Scan Completed/Signed Letter and Submit to Federal Service Desk by creating a service
ticket and attaching the scanned letter.
• Enter in System of Award Management
• (SAM); Issue Type; Business Type; DUNS Number; and “Subject: Letter Designating Entity
• Administrator - New Registration,” and “Question: Please review the attached letter designating our
Entity Administrator.”

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Pause
The Ink is still dry - no guidance
from the SBA yet
Be hesitant of vendors who claim to
know everything about the
application process
Partner with a trusted professional
who has a track record of walking
you through these new rules

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Frequently Asked
Questions

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What if I Started a Business in 2019
 Compare average monthly annualized gross receipts from 2019 to 2020
 Restaurant opened in July 2019 had average, monthly gross receipts from
July to December of $100,000. In 2020 the same restaurant had gross
receipts of $500,000 for the entire year. The eligible revenue loss would be
$700,000 ($100,000 x 12 = $1,200,000 annualized 2019 gross receipts –
$500,000 2020 gross receipts = $700,000).

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What if I Started a Business in 2020?
 Compare gross receipts for 2020 to allowable expenses
 A business started in February 2020 had total qualified expenditures of
$700,000 and gross receipts of $500,000. It would be eligible for a
$200,000 grant.

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Do I Count My Non-Restaurant Locations?
 Example: 25 locations in business enterprise
• 10 restaurants
• 5 car washes
• 5 convenience stores
• 5 gas stations
 Unclear if the count includes all affiliated businesses or just affiliated
restaurant businesses

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What if I Have a “Mixed Use” Business
 Example: Deli/Convenience store
 No guidance yet so default will probably be to look at the NAICS code

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Do I Apply Separately for Each Business
 Each eligible entity can apply for the grant, but the aggregate maximum
rules apply
 Probably will look like the PPP application process

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Questions?

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Contact Your Presenters
Terry Moncrief
Partner
tmoncrief@withum.com
(732) 842-3113
Jeremias Ramos
Manager
jramos@withum.com
(212) 829-3248
Kathy Ennis
Partner
kennis@withum.com
(407) 849 1569