SBA Releases Draft Application and Program Guide for Restaurant Fund

SBA Releases Draft Application and Program Guide for Restaurant Fund

Authored by RSM US LLP|

On April 17, 2021 the SBA published two very important pieces of information for potential applicants to the Restaurant Revitalization Fund – a sample application and a program guide.

Confirming many of our prior thoughts, the SBA guidance provides more certainty on what is necessary for the application.

A few observations about the released guidance:

The Program Guide and sample application confirm the comments that the following businesses will need to demonstrate that onsite sales to the public comprise at least 33% of gross receipts.

  • Bakeries
  • Breweries and/or microbreweries
  • Wineries
  • Distilleries

Applicants should also be prepared with ownership information and affiliate information. The sample application requires disclosure of all owners with 20% or more of the equity of the Applicant. Importantly, if no owner has at least 20% ownership of the Applicant, enough owners must be listed to get to an at least 20% combined equity ownership of the Applicant.

Applicants should also gather information about any PPP loans received during 2020 and/or 2021. The sample applications requires the Applicant to provide both the amount received and the PPP loan number.

Helpfully, the sample application provides tables to assist in calculating gross receipts of the Applicant. For many applicants, gross receipts will come from the 2019 and 2020 income tax returns. As we provided previously, gross receipts are not to include amounts received from any PPP loan, SBA 7(a) debt relief payments, EIDL loan, EIDL advance, targeted EIDL advance or state and local small business grants. Applicants may wish to consult with their tax advisor on gross receipts.

Applicants that started operations between Jan. 1, 2020 and March 10, 2021 or applicants that have not yet opened, but have incurred eligible expenses calculate grant amounts using the amount spent on eligible expenses, which are the same expenses that are qualified uses of this grant money.

The Program Guide contains many helpful definitions for applicants, including the definition of gross receipts. In what should be simplification, the Program Guide cross-references the line items on the tax returns to report as the gross receipts (generally the gross receipts net of allowances number).

Also contained within the Program Guidance are three ways for applicants to apply. Through a recognized SBA Restaurant Partner (list to be released), through SBA directly at restaurants.sba.gov, and telephonically at (844) 279-8898.

We anticipate at least one additional update to the program guide before the program is live. Potential applicants, though, should utilize these SBA resources to prepare to apply.

DO YOU HAVE QUESTIONS OR WANT TO TALK?

Fill out the form below and we’ll contact you to discuss your specific situation.

  • Message:
  • Topic Name:
  • Should be Empty:

This article was written by Mathew Talcoff, John Nicolopoulos, Tracy Burr, Ryan Corcoran and originally appeared on 2021-04-19.
2020 RSM US LLP. All rights reserved.
https://rsmus.com/what-we-do/services/tax/federal-tax/accounting-for-income-taxes/sba-releases-draft-application-and-program-guide-for-restaurant.html

The information contained herein is general in nature and based on authorities that are subject to change. RSM US LLP guarantees neither the accuracy nor completeness of any information and is not responsible for any errors or omissions, or for results obtained by others as a result of reliance upon such information. RSM US LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect information contained herein. This publication does not, and is not intended to, provide legal, tax or accounting advice, and readers should consult their tax advisors concerning the application of tax laws to their particular situations. This analysis is not tax advice and is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties that may be imposed on any taxpayer.

RSM US Alliance provides its members with access to resources of RSM US LLP. RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each are separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. Visit rsmus.com/aboutus for more information regarding RSM US LLP and RSM International. The RSM(tm) brandmark is used under license by RSM US LLP. RSM US Alliance products and services are proprietary to RSM US LLP.


RSM

Haynie & Company is a proud member of RSM US Alliance, a premier affiliation of independent accounting and consulting firms in the United States. RSM US Alliance provides our firm with access to resources of RSM US LLP, the leading provider of audit, tax and consulting services focused on the middle market. RSM US LLP is a licensed CPA firm and the U.S. member of RSM International, a global network of independent audit, tax and consulting firms with more than 43,000 people in over 120 countries.

Our membership in RSM US Alliance has elevated our capabilities in the marketplace, helping to differentiate our firm from the competition while allowing us to maintain our independence and entrepreneurial culture. We have access to a valuable peer network of like-sized firms as well as a broad range of tools, expertise, and technical resources.