Tag Archives: RRF

COVID-19 Financial Relief, Education, Tips

Final Restaurant Revitalization Fund (RRF) SBA Report Due April 30, 2023 — Here’s How to File

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In this YouTube video, I demonstrate how to use the AICPA RRF tracker tool for SBA reporting.

Only 60% of restaurants that applied actually received funding for the popular Restaurant Revitalization Fund program (RRF), due to a failure of Congress to replenish the kitty with leftover PPP money, as was envisioned. (A substitute Restaurant Revitalization Tax Credit bill is currently languishing.) After the SBA disbursed the last of the funds in November of 2022, you might think that all was said and done on the topic; but in fact, recipients of those funds still need to report to the SBA that the money was indeed used according to the program’s rules.

There were three SBA reporting dates: December 31, 2021; December 31, 2022; and a final report date of April 30, 2023 — which is fast approaching. The RRF eligible expense period, however, allows costs from the very beginning of the pandemic, February 15, 2020, clear through to March 11, 2023. The two year-end reporting dates were intended as just a progress report of what the recipients had spent so far in eligible costs.

The great news for most businesses was that if all the RRF funds were allocated to eligible costs before the first reporting date, no additional reporting was required. If not, then the business needed to come back the following year and report a second time. At this point, most restaurants have (hopefully) already submitted their final report.

However, for those who missed the first two reporting dates; or somehow didn’t expend all the funds before the end of 2022; or simply did not understand how to report properly; or didn’t realize what a wide date range of eligible expenses they could use… there is one shot left at a final report to the SBA, or they risk having to pay back the funds.

This blog post (with a 20-min video walking you through the process) is our suggestion of how to translate the info you already have in your bookkeeping software into a format that will easily conform to the Restaurant Revitalization Award Portal requirements.

Sample email from SBA regarding the initial RRF year-end reporting

Spoiler alert: the process takes more than 5 minutes. It can easily take an hour or more. The actual entering of data into the SBA RRF portal is the part that only takes 5 or so minutes.

Our recommendation is to download the free Restaurant Revitalization Fund Tracker from the American Institute of CPAs (AICPA) website (as with their PPP Forgiveness Calculator, you do have to register for an account, but there’s no charge). However, instead of entering each individual transaction on the form (as it’s designed for you to do), our suggested shortcut is to take the information you already have in your bookkeeping file and enter each category as one line — then subtract all the non-RRF grants and assistance received, so that you’re not double-dipping.

As mentioned earlier, the RRF period runs from February 15, 2020 — the very beginning of the pandemic — to March 11, 2023. So we suggest you run a Profit & Loss for your company for the period of February 15, 2020 all the way through March 11, 2023 (or February 28, 2023 if you’re doing this before March 2023 is reconciled), and use those numbers to report what has been spent so far. Then enter the non-RRF grant funds as negative numbers on the same Expense Tracker tab, so that they net against each other. The result will be the data you submit to the SBA at restaurants.sba.gov once you log in to your portal.

I recorded a video illustrating the whole process back in December 2021 — the one big difference is simply the ending date of the report you’ll run.

Here are the steps:

Step 1 – download the AICPA RRF Tracking Tool
Step 2 – enter the name of your company in the Summary tab, cell A9
Step 3 – enter the RRF amount in the Expense Tracker tab, cell C6
Step 4 – run your Profit & Loss from 2/15/2020-2/28/2023 (or 3/11/23 if you’re doing this in April 2023)
Step 5 – export to Excel and save to your RRF file folder
Step 6 – on the Expense Tracker tab, enter summary amounts from the Profit & Loss for Payroll, Rent, Utilities, Food & Beverage, Maintenance, Supplies, Covered Supplier Costs, and Business Operations Expenses

Tip: skip Mortgage Payments, Debt Service, Outdoor Seating Construction, and Depreciation, or ask your accountant for help with these, as they are usually on the Balance Sheet or in the Non-Operating Expense section of the Profit & Loss, and are therefore harder to DIY.

Tip: Business Operations Expenses are all operating expenses that are not already accounted for in one of the other categories.

Step 7 – IMPORTANT: enter all the non-RRF grants and financial assistance as negative amounts on the Expense Tracker tab — this is to prevent any double-dipping
Step 8 – go to restaurants.sba.gov and log in
Step 9 – enter your name, address, EIN, phone, and email (if this information is not already there)
Step 10 – enter the amounts from the Summary tab — Note: you cannot enter more than the total RRF grant, so you may need to reduce one or more of the categories so that you don’t exceed the total.
Step 11 – if you have allocated all the RRF funds, certify as such — you will not be required to repeat this progress report next year; if you have not allocated all the RRF funds, you will be able to “Save” but not “Submit”.

You have until March 11, 2023 to allocate all the funds (aka spend them on eligible expenses), and until April 30, 2023 for final reporting. If it turns out you didn’t have enough eligible expenses from 2/15/20-3/11/23 using Profit & Loss Operating Expenses, then take some time to work with your accountant to determine if you have debt service, mortgage payments, capital expenses for outdoor seating, or depreciation that counts toward allowable costs.

In all cases: make sure to subtract all other grant income from expenses so you are not double-dipping!

23-minute video walking you through the whole process in Dec 2021

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COVID-19 Financial Relief, Education, Tips

Tips & Tricks for Restaurant Revitalization Fund (RRF) Year-End Reporting

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With one week left before year-end, it’s possible that you are among the folks who received an email (below) back in October but hasn’t yet reported to the SBA on the eligible expenses incurred so far. This blog post (with a 20-min video walking you through the whole process) is our suggestion of how to translate the info you already have in QuickBooks into a format that will easily conform to the Restaurant Revitalization Award Portal requirements.

Sample email from SBA regarding RRF year-end reporting.

Spoiler alert: the process takes more than 5 minutes. It can easily take an hour or more. The actual entering of data into the SBA RRF portal is the part that only takes 5 or so minutes.

Our recommendation is to download the free Restaurant Revitalization Fund Tracker from the American Institute of CPAs (AICPA) website (like their PPP Forgiveness Calculator, you do have to register for an account, but there’s no charge). However, instead of entering each individual transaction on the form (as it’s designed for you to do), our suggested shortcut is to take the information you already have in your QuickBooks file and enter each category as one line — then subtract all the non-RRF grants and assistance received, so that you’re not double-dipping.

The RRF period runs from February 15, 2020 — the very beginning of the pandemic — to March 11, 2023. The year-end reporting is just a progress report of what you’ve spent so far that is eligible for RRF program fund allocation. So we suggest you run a Profit & Loss for your company for the period of February 15, 2020 all the way through November 30, 2021 (or whatever your most recently reconciled month-end is), and use those numbers to report what has been spent so far. Then enter the non-RRF grant funds as negative numbers on the same Expense Tracker tab, so that they net against each other. The result will be the data you submit to the SBA at restaurants.sba.gov once you log in to your portal.

I’ve recorded a video illustrating the whole process — but in case you want a follow-along checklist, here it is:

Step 1 – download the AICPA RRF Tracking Tool
Step 2 – enter the name of your company in the Summary tab, cell A9
Step 3 – enter the RRF amount in the Expense Tracker tab, cell C6
Step 4 – run your Profit & Loss from 2/15/2020-11/20/2021
Step 5 – export to Excel and save to your RRF file folder
Step 6 – on the Expense Tracker tab, enter summary amounts from the Profit & Loss for Payroll, Rent, Utilities, Food & Beverage, Maintenance, Supplies, Covered Supplier Costs, and Business Operations Expenses

Tip: for now, skip Mortgage Payments, Debt Service, Outdoor Seating Construction, and Depreciation, or ask your accountant for help with these, as they are usually on the Balance Sheet or in the Non-Operating Expense section of the Profit & Loss, and are therefore harder to DIY.

Tip: Business Operations Expenses are all operating expenses that are not already accounted for in one of the other categories.

Step 7 – IMPORTANT: enter all the non-RRF grants and financial assistance as negative amounts on the Expense Tracker tab — this is to prevent any double-dipping
Step 8 – go to restaurants.sba.gov and log in
Step 9 – enter your name, address, EIN, phone, and email (if this information is not already there)
Step 10 – enter the amounts from the Summary tab — Note: you cannot enter more than the total RRF grant, so you may need to reduce one or more of the categories so that you don’t exceed the total.
Step 11 – if you have allocated all the RRF funds, certify as such — you will not be required to repeat this progress report next year; if you have not allocated all the RRF funds, you will be able to “Save” but not “Submit”.

If you have not allocated all the funds yet, then follow this same process next year by December 31, 2022 — you can run the Profit & Loss from 12/1/2021-11/30/2022 at that point and follow the same approach. Most folks will have sufficient eligible expenses from 2/15/2020-11/30/2021 to “use up” the whole RRF grant, but after subtracting other grant income from expenses, may find that they still have a balance left over that they can allocate costs to when reporting at the end of 2022.

You have until March 11, 2023 to allocate all the funds (aka spend them on operating expenses, and until April 30, 2023 for final reporting. If it turns out you didn’t have enough eligible expenses from 2/15/20-11/30/21 using Profit & Loss Operating Expenses, then take some time to work with your accountant to determine if you have debt service, mortgage payments, capital expenses for outdoor seating, or depreciation that counts. You can report these in next year’s RRF Program Post-Award Report, along with next year’s Profit & Loss Operating Expenses. In all cases: make sure to subtract all other grant income from expenses so you are not double-dipping!

23-minute video walking you through the whole process — Merry Christmas!

If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. Ths allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.

Cooperatives, COVID-19 Financial Relief, Education

Covid-19 Relief Program Updates and Q&A Webinar

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COVID Relief Program Updates and Q&A – Wegner CPAs

My excellent colleagues over at Wegner CPAs are providing yet another free webinar on the remaining Covid-19 relief programs for small business owners.

Do you still have questions about the COVID relief programs? Join us for an overview of what’s available and learn about any updates to the:

  • Paycheck Protection Program
  • Employee Retention Credit
  • Economic Injury Disaster Loan Advance Program
  • Shuttered Venue Operators Grant
  • Restaurant Revitalization Fund Program

Please indicate questions you have about these programs during registration so they can be addressed in the presentation. Time will also be available for live Q&A.

Presented by:

Kate Serpe, CPA, Senior Manager, joined Wegner CPAs as an intern in 2010 and was hired full-time as part of the Accounting Solutions Group in 2011. Kate has experience providing controllership and CFO services to cooperatives and not for profit organizations and specializes in board presentations and assisting clients with strategic planning.

Dan Bergs, CPA, Senior Manager, joined Wegner CPAs as an intern in 2008 and started full-time after graduation in 2010. He specializes in working individual and business clients providing them with a variety of tax and accounting services.

If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. Ths allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.

COVID-19 Financial Relief, Tips

Restaurant Revitalization Fund Update: What To Expect Next

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Excerpt from SBA email informing an applicant that their application for the RRF was approved.

The Journal of Accountancy reported on May 10th that, “a week after opening the $28.6 billion RRF, the U.S. Small Business Administration (SBA) said late Monday afternoon that it had begun sending out more than $2 billion in a first round of funding to restaurants, bars, and other eligible applicants.”

For the first 21 days the SBA will prioritize reviewing applications from small businesses owned by women, veterans, and socially and economically disadvantaged individuals.

After the first 21 days, the SBA will fund all eligible applications on a first-come, first-served basis. Approved applicants should expect an average of 14 days for processing, review, approval, and funds distribution.

So what will this approval look like for you and your clients? The SBA will send an email with the subject “SBA Restaurant Revitalization Fund – Congratulations – Award Approved”. Enough phishers are out there that it pays to be careful, and so some recipients have ignored it because it seems too good to be true, or were suspicious of the no-reply@sba.gov email address. Remember that the SBA will not ask you for any information or provide a link for you in this email. Do not click on any links. If you have any questions, please contact the SBA’s RRF call-center support at 1-844-279-8898. The are available Monday-Friday, from 8 am – 8 pm ET.

When you log into the SBA’s RRF portal that you registered for before applying — restaurants.sba.gov — you will see, on the left-hand side, a “Status” tab. If your application was approved, it will list your award amount, SBA Number, and application status will say “SBA Decision (Approved)”.

The SBA will process the funding of the award directly to the bank account you provided during the application. Again, do not enter any bank information — this was verified during the application process and the SBA will not ask you for it again. If you have any concerns, please call their support line at 1-844-279-8898. The award will be funded within seven business days of the email notification — check your bank account as the final confirmation that this is real.

Make sure to use the restaurants.sba.gov portal to check your application’s status and monitor any messages from the SBA. They will send an email if they have any issues funding the award, but if you are worried about phishing or the message going to your spam folder, the portal and the call center are resources you can access.

UPDATE: For those not yet in the approval stage: it may appear that your application has reverted to a previous step. Please don’t panic — if more information is needed to process your application, you will receive a note directly from the SBA with an email ending in @sba.gov.

In yesterday’s Journal of Accountancy, they noted that the RRF program received 266,000 applications seeking a total of $65 billion, far more than the $28.6 billion Congress allocated the program. As a result, it has less than half the money needed to fund the existing requests.

“Unless Congress passes legislation providing the RRF with fresh funding, the program looks certain to provide the vast majority of its funding to eligible businesses owned by women, veterans, and socially and economically disadvantaged individuals. The American Rescue Plan Act, P.L. 117-2, which created the RRF, mandated that those businesses, which have submitted 147,000 applications totaling $29 billion, receive priority review for the first 21 days of the program,” the Journal notes.

The SBA said it would keep the RRF application portal open for now, because it still has some portion of funding set aside for eligible establishments with 2019 annual revenue of not more than $50,000.

After the first 21 days, the SBA will fund all eligible applications on a first-come, first-served basis, which is why it was so important to submit on Day One.

UPDATE: The Independent Restaurant Coalition released a fact sheet late this afternoon outlining what’s next and it deserves a read.

If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. Ths allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.

COVID-19 Financial Relief, Education, POS - Point of Sale, Tips

Restaurant Revitalization Fund: Are You Ready?

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It’s almost here! The SBA Restaurant Relief Fund will begin accepting applications on Monday, May 3 at 11 am Central Time. Are you ready? What should you be doing to prepare?

To our surprise, the SBA announced last week that all eligible restaurants should apply the moment the portal opens on Day One, regardless of whether they are in the priority groups or not. Those not eligible for review in the first 21 days will be time-stamped and reviewed first-come-first-served in the following period. Therefore, if you are a restaurant owner of any type, make sure to take these steps between now and Monday morning if you haven’t already. Don’t wait until the portal opens to get started — be prepared in advance!

First, calculate your potential grant amount to make sure you are eligible. Do not include state and local Covid-19 grants, or PPP funding, in “gross receipts”. For my clients, I recommend you use “gross receipts minus returns and allowances” on Line 1c (Line 3 for Schedule C filers) of your business tax return. The financial relief, by contrast, should either be on the “Other Income” line (state & local grants), or not entered at all (in the case of PPP), as they are considered non-operating income. Ask your tax preparer if you are unsure.

Follow the instructions in this chart to estimate your RRF grant amount. If you were in business prior to 2019, use Calculation #1 — this will be the vast majority of restaurants.

If the amount is less than $1000 (or negative), you are not eligible. Although it’s frustrating that funding will not be available, at least you don’t have to go through the rest of the steps — silver lining!

Presuming your result is $1000 or more, please take the next steps seriously. Funding for this program is not sufficient for the number of applicants. This is your chance to be ahead of the game.

  1. Watch a recent SBA webinar that walks you through the registration and application process.
  2. Review this short, handy step-by-step guide.
  3. Download and review screenshots from the portal.
  4. Register for an SBA RRF Portal account (unless you are applying through your Square/Toast POS). Do not wait until the program opens to register — the system opened up for registration this past Friday at 8 am Central.
    • Note: you will need a cell phone to get a Two-Factor Authentication code; this is required when setting up an account.
    • This registration is independent of any other SBA account you might have — the RRF portal is a separate website/login.
    • Bookmark this site and make sure you have everything you need to easily log in when the program goes live.
  5. If applying through your Square or Toast Point of Sale (POS) system, familiarize yourself with their guidelines. We recommend you only use this option if 1) nearly all of your gross receipts run through the POS; or, 2) your 2020 tax return is not available.
  6. Read the SBA RRF Program Guide.
  7. Read the definitions for “priority groups” (women-owned, veteran-owned, socially-or-economically-disadvantaged individual-owned) — especially for those with more than one owner — to determine if you can self-certify or not.
  8. Download and fill out the sample application.
    • You will need to know things like your business entity type, tax ID #, PPP Draw 1 & 2 loan numbers, bank ACH info, owner percentages and tax ID #s, and your very first day of sales.
    • As mentioned above, if you were in business prior to 2019, you should use Table 1 and ignore Tables 2 and 3.
    • Use this filled-out application as your cheat-sheet when filling out the online application when the system goes live.
  9. Make sure you have all your supporting documentation saved to a single, easily-accessible folder on your computer, and that you have clearly named each file. Acceptable file formats are: PDF, JPG, GIF, TIFF or PNG.
    • Preferred proof of gross receipts decline will be your 2019 and 2020 tax returns (unless you are applying through Square/Toast).
      Your 2019 tax return and your 2019 & 2020 POS reports are also acceptable, though they may not include all your gross receipts, so we recommend using tax returns if you have them.
    • In addition, you may need the most recent three months of bank statements for the account that will be receiving the grant money, if the “auto-connect your bank” option does not work for some reason.
    • Clarity, precision, and organization is what’s important — not volume. Remember that a real human being will review the application at some point. Feel free to include a cover page that explains how you have organized things and what is where, the naming structure, etc.

If you have everything ready-to-go, it should only take 20-25 minutes to complete the application online when the system goes live.

Tips and notes:

  • Use the most modern browser possible — the current version of Chrome, Edge or Safari.
  • There are hover-tips practically everywhere on the portal that are really helpful, as well as an excellent searchable “KnowledgeBase” in the lower-right-hand corner of the website.
  • The SBA recommends you use the “auto-connect your bank” option instead of manually entering your ACH info — it will move through the process much faster and you will not need to upload three months of bank statements. You will be asked to select which of the bank accounts (if you have more than one) to link.
  • When signing, make sure your Title fits the entity type. (e.g., “Owner” rather than “CEO” for a sole proprietor).
  • Digital signature via Docusign at the end — if it doesn’t work, make sure your antivirus is disabled or try another browser.
  • There’s going to be personally-identifying info (PII) during registration and/or signing to make sure you are the person you say you are, so make sure to fill this return out yourself, rather than have your CPA or anyone else do it. Feel free to have them help you prepare the application that you will use for reference ahead-of-time instead if you need assistance.
  • You will get a confirmation ID. Please take a screenshot of this page.
  • If you realize afterwards that you made a mistake, call the call center and they will delete your application and you will have to start over.
  • The SBA will send a message through the portal’s message center if there are follow-up questions. You will receive an email each time there is a message; you do not need to log back in until you get a status notification, but it might be a safe thing to do in case something gets stuck in spam.
  • You can reach the SBA RRF call-center at 1-844-279-8898 for any issues or questions.

And finally… a few words to set expectations: I have every confidence that the SBA RRF portal servers will go down at some point. Instead of asking non-priority applicants to wait three weeks, they are asking literally every eligible restaurant in the country to apply at the same moment. The SVOG site went down on the first day and it took weeks for them to re-open it — and there are far more restaurants out there than performance venues. Obviously the SBA learned from that experience, so I am hopeful they are addressing these concerns… but it seems a staggered, time-stamped approach would have been safer. All that said, just do what the SBA recommends and apply in the first few minutes, but do not be surprised if you have to click “refresh” all day long. Maybe don’t make any other plans for the day just in case. For up-to-the-minute info, check twitter — either search for RRF or #RRF — this was an amazing community for the SVOG folks to come together for information and support when their issue occurred.

Good luck, everyone!

If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. Ths allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.

COVID-19 Financial Relief, Education, Illinois, POS - Point of Sale, Tips

Restaurant Revitalization Fund: SBA Portal Opens 4/30/21 & Goes Live 5/3/21

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Big news from the SBA that was summarized very well by both the Independent Restaurant Coalition and the National Restaurant Association.

Today, the Small Business Administration announced that Restaurant Revitalization Fund applications will open at 11 am Central Time on Monday, May 3, 2021.

To prepare to apply, please visit restaurants.sba.gov this Friday, April 30th after 8 am Central Time to create your account. We encourage you to register on Friday and submit your application on Monday.

The portal website will be restaurants.sba.gov. We suggest bookmarking this page now for use on Friday and Monday.

Please watch the 90-Second Advocacy Update with Sean Kennedy for a great overview of what’s next. (Spoiler alert: it’s closer to three minutes long.)

The SBA has provided many resources to help you prepare — links for training, recordings, a sample application, and more. Please see below (some info is from the national office and some is from Illinois; mind the time zones).

In preparation, qualifying applicants should familiarize themselves with the application process in advance to ensure a smooth and efficient application. Follow the steps below. 

  • Register for an account in advance at restaurants.sba.gov starting Friday, April 30 at 9 a.m. EDT. If you are working with Square or Toast, you do not need to register beforehand on the application portal.
  • Review the sample application, program guide and cross-program eligibility chart on SBA COVID-19 relief options. 
  • Attend one of the webinar trainings listed below. These will be recorded and later posted on SBA’s YouTube channel. We will share the recording links via email and on SBA’s social media channels.

For more information, visit sba.gov/restaurants. 

About Restaurant Revitalization Fund The Restaurant Revitalization Fund (RRF) provides 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.

More about RRF Registration and application information Registration will begin on Friday, April 30, 2021, at 8 a.m. Central Time and applications will open on Monday, May 3, 2021, at 11 a.m. Central Time. The online application will remain open to any eligible establishment until all funds are exhausted.  Read more

Restaurant Revitalization Fund Training Opportunities National RRF Training: Application Overview SBA is hosting two national webinars on the Restaurant Revitalization Fund that will demonstrate how to submit an application through the portal. Both webinars will cover the same content, so choose a time that works for you! April 27, 1:30 pm April 28, 1:30 pm Register Register PPSINational RRF Briefing with SBA Administrator The SBA and the Public Private Strategies Institute (PPSI) are hosting a national briefing on the new $28.6 billion Restaurant Revitalization Fund. SBA Administrator Isabella Casillas Guzman will kick off this event. This briefing is cosponsored by the SBA and PPSI.   April 28, 12 p.m. Register
Local RRF Training Watch a replay of the Illinois District Office RRF training that took place on Friday, April 23 at 4:00 p.m. to learn more about the program. Stay connected with us for more local training opportunities! Watch a replay 

RRF Resources in English and Other Languages Have a question? See if there’s an answer in the RRF knowledge base. Call center support: 1-844-279-8898  in multiple languages RRF information is now available in 17 languages Program guide Sample application NEW: 1 page overview flyer  If you haven’t already, sign up for RRF email updates. Review the sample application, program guide, and cross-program eligibility chart on SBA COVID-19 relief options. You will be able to apply through SBA-recognized Point of Sale Restaurant Partners or directly via SBA at restaurants.sba.gov.  All info about RRF E-mail questions to illinois.do@sba.gov.

If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. Ths allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.

COVID-19 Financial Relief, Education, POS - Point of Sale, Tips

Restaurant Revitalization Fund: Free Webinar 4/27 – Walk-Through SBA Application

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Cafe Mustache, Logan Square, Chicago, IL

Restaurant Revitalization Fund (RRF) Update:

A trusted colleague’s firm released an excellent blog post on recent SBA guidance for the Restaurant Revitalization Fund that I encourage you all to read and share.

They are also offering a free webinar the morning of Tuesday, April 27th to walk through the draft application. I recommend registering if you are available at that time.

Apparently, certain Point of Sale systems will be working with the SBA to create online portals to help their restaurant-customers apply with existing POS data. Keep an eye out for anything from your POS provider on the topic.

We continue to prioritize finalizing ERC/PPP calculations for restaurant clients and will be reaching out soon to each of our clients with this information.

If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. Ths allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.

COVID-19 Financial Relief, Education, Tips

Restaurant Revitalization Fund: Sample Application Released 4/17/21

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Build Coffee, Hyde Park, Chicago, IL

From the National Restaurant Association, April 17th:

The SBA just released a sample application for the Restaurant Revitalization Fund (RRF) and a program guide.

The SBA has not announced when they will begin accepting applications – today’s release is a sample application and guide so that restaurants can review and prepare.

We have reviewed early drafts of the application and discussed them with the SBA. Our FAQ document, released earlier this week, reflects this.

The link to the SBA RRF page is here. We are organizing regional and national briefings with our state partners and you’ll be hearing more from us soon. 

Note: the SBA also released a cross-program eligibility chart.

If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. Ths allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.

COVID-19 Financial Relief, Education, Tips

Restaurant Revitalization Fund: 4/13 SBA + IRC Webinar

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Today’s excellent Restaurant Relief Town Hall was recorded and released later in the day for all to enjoy.

Erika Polmar, of the Independent Restaurant Coalition, was joined this time by two representatives of the SBA: Patrick Kelley and Julie Verratti. These two were not just talking heads who simply touted how great the program is — instead they gave real guidance, solid explanations, and answered many questions from the IRC and attendees.

I was encouraged in part because Patrick and Julie are actually crafting the program, refining it, and working with groups such as IRC to make it happen. They showed an eagerness to make this program a success, and the skills to back it up. Julie Verratti in particular was a welcome change to what we’ve seen at the SBA over the past year — she was articulate, knowledgeable, humble, and seemed to have a real comprehension of the issues at hand and what is at stake; she gets why it’s so important to get this program right. She also has a good handle on what elements of the program come from statute and where the SBA has authority to interpret and administrate. Patrick indicated appropriate deference to her knowledge, and to the process of getting the program designed and tested properly — before opening the floodgates to applications. Let’s hope these two keep up the good work and have what they need to roll this out effectively.

As usual, I took notes — they did a full overview plus deep dives into certain areas and it’s worth your hour of time to watch. These notes are just the noteworthy new items from my own perspective.

The biggest news is that the SBA Administrator has chosen to preemptively extend the final date for expending the funds all the way to 3/11/2023 — the maximum allowed by statute.

Debt service will be considered a covered expense — both principal and interest payments count! (Clarification: no debt prepayments allowed, but regular debt service of all types is permitted.)

Also on the list of covered expenses is depreciation — but not “bonus or accelerated”.

Related follow-up question: does that mean we have to recalculate depreciation from the usual MACRS to straight-line? That doesn’t seem like what he meant, but we’ll need clarification. I suspect he was only referring to bonus depreciation and Section 179 expensing.

Women-owned, veteran-owned, socially/economically disadvantaged individuals – if anyone owns 20% or more and qualifies in one of these groups, add them together, to see if they reach 51%. If so, they can use the 21-day priority period.

Related follow-up question: to clarify — a 50/50 husband-wife owned company would NOT qualify as women-owned?

They said numerous times that everybody should apply on Day One.

Related follow-up question: How will the SBA avoid the system going down if everyone is applying on Day One, like what happened with the SVOG?

Related follow-up question: is this the case even if they’re not qualified to apply during the 21-day priority period? So a white-cis-male-owned restaurant under $500k revenue should still apply on Day One?

Timing of opening the program: SBA will have a 7-day pilot period to test their system (with people randomly selected from self-identifying as veteran, women-owned from PPP applications), and only then will go live with the 21-day advance application period for those who qualify.

Related follow-up question: How much notice will we have that the RRF is opening? Do we know when it is going live? As a CPA firm we are scrambling to calculate PPP1 Forgiveness and 2020 ERC so we can get the amount of ERC-eligible wages pulled off the 2020 returns before filing them. But we don’t have IRS guidance about whether 50%+ owners are allowed to take ERC… so all those returns are on extension right now. We want to make sure we wait as long as possible to get them all filed (in case IRS comes out with guidance), but that they are all submitted before this program goes live.

They will be working on allowing many different forms of documentation to prove the revenue decline, but tax returns, as they said last time, will be the easiest, most streamlined and efficient approach. Form 4506-T will be submitted through the docusign e-signature portion of the application, which allows SBA to confirm tax information with the IRS.

That’s it for now — I encourage you to watch the webinar and to start planning for an opening that’s more likely going to be a week or two away, rather than between now and the 19th (as was suggested last week). For planning purposes we at least know we’ll have a full week from when they start testing the application portal (though I’m not sure how we’ll know when that will begin).

Julie Verratti used the phrase “working in the world of reality and not in a vacuum” to describe their relationship with IRC and why they are doing this kind of outreach — some of the most encouraging words the SBA could possibly offer to us after the past year of jumping through hoops for financial relief.

If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. Ths allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.

COVID-19 Financial Relief, Education, Tips

Restaurant Revitalization Fund: Free Webinar from Rep. Lee & New NRA FAQ

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Still no word on the SBA guidance we had hoped for this past Friday, but the end of the week did bring us some new info about the Restaurant Revitalization Fund.

On April 8th, Congresswoman Barbara Lee hosted a free informational webinar that was chock-full of excellent info. If you don’t have time to watch the full 41-minutes, then take a look at her twitter thread to see excerpts of the most frequently-asked questions.

Then on the following day, the National Restaurant Association released an informative updated FAQ about the RRF program. There are 39 questions in the FAQ and every one is worth reading. Please — whether you are a restaurant owner or you work with them… do your homework! I know we’re all exhausted, but this is too important not to: check it out. If you absolutely must read a summary for now, this “Nation’s Restaurant News” article does a nice job.

There were only two new pieces of info on the FAQ since the notes I took at the IRC webinar, as far as I could tell:
1) PPP loans are deducted from total eligible funds, but EIDLs and ERTCs will likely not be. This makes sense, since an Employee Retention Credit does not show up as income on a tax return, but it’s nice to know NRA doesn’t expect it to count as income, either.
2) The minimum grant award may be set at $1,000. This is apparently to address the effort that goes into applying — so many got paltry PPP loans unexpectedly and were frustrated at so little reward after so much effort.

It also reiterates the following details:
– The covered period may extend through March 2023
– Permanently closed and bankrupt businesses without reorganization plans are ineligible
– Businesses owned by women, veterans and socially/economically disadvantaged individuals will require self-certification
– Eligible expenses include maintenance and construction
– RRF grants will not be taxed as income, but are eligible for federal tax deductions

Cross your fingers for upcoming guidance from the SBA, a draft application, and a date for the program opening. We are hoping for at least a week’s notice between the draft being released and the program going live, so that small business owners and their accountants have sufficient time to prepare.

If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. Ths allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.