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Fermented Strategies - Restaurant Revitalization Funds- Issue #27

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April 29 · Issue #27 · View online
Fermented Strategies - Craft Brewing Industry Newsletter
Restaurant Revitalization Fund Grants are Opening Soon!
Another potential stimulus benefit for breweries is on the horizon.  The Restaurant Revitalization Fund (RRF) is a grant offered by the SBA that will provide funds to applicable businesses.  Breweries are eligible as long as at least 33% of their sales were onsite in 2019 or for breweries that opened in 2020, your business model should contemplate at least 33% of onsite sales.
For breweries opened prior to 2019, the way you calculate the grant is to subtract your 2020 gross revenues and your PPP loans (both the first draw and second draw) from your 2019 gross revenues.  If your answer is a positive answer, that will be the amount of your grant. For example, if your 2019 gross revenues were $800,000 and your 2020 gross revenues were $500,000 and you received $200,000 total in PPP loans, then your grant amount would be $100,000 ($800,000 - $500,000 - $200,000).
Some high level thoughts on the above.  One, if your gross revenues in 2020 exceeded 2019 gross revenues, then you will not qualify for this grant. Two, if your 2019 gross revenues exceeded the 2020 gross revenues, but the difference was less than the PPP loans you received, then you also do not qualify for the grant. 
This brings up an interesting situation. If you qualify for the Employee Retention Credit, you might be better off giving back your second draw PPP loan if that meant you could replace the second draw PPP loan with the RRF grant.  In doing this, you would open up your payroll costs  to be used for the ERC instead of PPP loan forgiveness which will allow you to get the credit, replace the second draw PPP with RRF grants, and not worry about needing to file for forgiveness for the second draw PPP. 
There are two other ways to calculate out your grant amount for breweries that opened after 2018.  The first is for breweries that opened up in 2020 or 2021 or have not opened yet.  This calculation method looks at what your eligible expenses were from February 15, 2020 and March 11, 2021 and then subtract out gross receipts and PPP loan amounts. If that total is a positive number, that is your grant amount.
The third way to calculate out the grant amount is for businesses that opened up at some point during 2019.  These breweries can either use the second method discussed above or they can calculate out their average monthly revenue in 2019, annualized that total and then subtract out the 2020 gross receipts and the PPP loans.
Note that for breweries that operate multiple locations, you should do your calculations by location and then add up the totals.  For example, if a brewery that started in 2016 opened up their second location in 2020, they should do the calculation for the first location based on businesses that were open prior to 2019 and do the calculation for businesses opened during 2020 for the second location and add up the results to get the grant total.
The grant funds can be used for any business operating expenses and must be used by March 11, 2023. You are required to report annually what funds you have used during that given year.  You can apply directly through the SBA or through selected point of sale softwares like Square or Toast.
Applications open on May 3 at 11am central time to businesses that are 51% or more owned by women, veterans, and socially or economically disadvantaged groups. This priority group will be able to apply exclusively from May 3 to May 24.  After that period of time, then it will open up to everyone.
For a calculator to use to help calculate out your RRF grant, please see the link below
https://docs.google.com/spreadsheets/d/189PTItzDJHCBtQEDxKc0uue3jM4NkPRQP1TlT-9WcT8/edit?usp=sharing
If you have any questions or want assistance in obtaining this grant, please reach out to me directly at josh@lancecpa.com.

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