The Restaurant Revitalization Fund is a reality with the passage of the American Rescue Plan Act. Restaurant owners are asking what to do next. The answers are coming out slowly and no one anticipates any grants to be available until April or May. However, We Sell Restaurants continues to stay educated and involved so we can provide answers. There are three steps we recommend the restaurants owners go ahead and take to be sure they in line for the relief.
First, here are a few quick reminders on the bill which funded $28.6 billion in relief with $5 billion of that number reserved for businesses with annual sales under $500,000. That means a lot of small restaurants sold by the restaurant brokers will qualify.
You can receive a tax-free federal grant equal to the loss of sales from 2019 to 2020.
The grant amount calculation is based on the difference in revenue between 2019 and 2020. It is reduced by the amount you received from the Paycheck Protection Program (PPP) first and second draw loans EVEN IF you already applied for forgiveness. It is NOT impacted by the amount of any Emergency Injury Disaster Loans (EIDL) restaurant owners received.
For the first 21-days after it launches, the SBA will prioritize grants for small businesses owned and controlled by women, veterans or socially and economically disadvantaged small business concerns.
You must own less than twenty locations (together with any affiliated businesses).
Eligible businesses include restaurants, food stands, food trucks, food carts, caterers, saloons, inns, taverns, bar lounges, brewpub tasting room, taproom, or any other similar place of business in which the public or patrons assemble for the primary purpose of being served food or drink.
Eligible expenses are those incurred from February 15, 2020 to December 31, 2021 and there will be some form of accounting for where the funds are spent.
Funds from the grants should be spent on payroll; principal or interest on mortgages, rent; utilities; maintenance including construction to accommodate outdoor seating; supplies such as protective equipment and cleaning materials; normal food and beverage inventory; certain covered supplier costs; operational expenses; paid sick leave; and any other expenses that the SBA determines to be essential to maintaining operations.
CALCULATION:
2020 Revenue minus 2019 Revenue minus 1st & 2nd PPP loans = Grant amount available
Now for the hard stuff. You have three things you can do NOW to make sure you are ready to receive funds. The restaurant brokers at We Sell Restaurants recommend you go ahead and take care of these three steps now.
Step 1:
Sign up for a DUNS Numbers (Data Universal Number System) at this link (https://www.dnb.com/duns-number/get-a-dns.html) This is free and takes up to two business days to process. It is issued by Dun & Bradstreet.
They will ask you the Primary Reason for your D-U-N-S Number Registration. Respond: I’m a U.S. Government Contractor or Grantee
Why? Because the government grant program requires a DUNS number. If you don’t complete this initial step, you cannot qualify for aid.
Step 2:
Complete an account at www.sam.gov You need your DUNS number (from Step 1) before you can complete this step. It is free and can take up to two weeks.
Be careful. There is a lot of information requested and it should be carefully entered in order to make sure they understand who you are and why you qualify.
They will ask for things like your tax identification number (EIN) and bank account information. This is how they will track and transfer money to you. This is a government website so make sure you are at the right place before you enter this sensitive information.
Step 3:
In order to reduce fraud, there is a final step which is a SAM notarized letter. You can download the template on the Sam.gov website at this link.
Once you download it and put on your letterhead, you should sign it in the presence of a notary in your state. Then scan and upload the file. Follow the exact instructions below:
First – Create a service ticket on the sam.gov website using these criteria:
This feels like a lot of work, but this is FREE MONEY that you are entitled to as a restaurant owner so it’s worth taking a little time to execute these steps to access funds. .
Lastly, start to gather all your documents (POS reports or similar) to show the losses in sales from 2020 to 2019.
A few other quick tips.
If it feels overwhelming, get someone with good computer skills to assist you or ask your bookkeeper or CPA to help. You may also contact your state restaurant association.
These processes are just the initial starting point and are subject to change. Just think how many times the PPP process changed and anticipate that we’ll get new direction that we will pass on to you shortly.
Be overly cautious of any vendor who says they know how to help you with this. We recommend you rely on your CPA or bookkeeper. This is a new program and you do not want to fall for any kind of a scam. The government will not call you for this information. You will need to start these steps to get the process started.
Go ahead and do your first three steps now. We Sell Restaurants will continue to keep you updated on next steps to ensure our restaurant owners can take advantage of this program.