After our prior email we receive various emails with question. This will hopefully address most of them.
Who is Eligible?
Eligible entities who have experienced pandemic-related revenue loss include:
- Food stands, food trucks, food carts
- Bars, saloons, lounges, taverns
- Snack and nonalcoholic beverage bars
- Bakeries (onsite sales to the public comprise at least 33% of gross receipts)
- Brewpubs, tasting rooms, taprooms (onsite sales to the public comprise at least 33% of gross receipts)
- Breweries and/or microbreweries (onsite sales to the public comprise at least 33% of gross receipts)
- Wineries and distilleries (onsite sales to the public comprise at least 33% of gross receipts)
- Inns (onsite sales of food and beverage to the public comprise at least 33% of gross receipts)
- Licensed facilities or premises of a beverage alcohol producer where the public may taste, sample, or purchase products
If you don’t see your business here but it is close or related, then we could ask the SBA.
This is a list of documents that you will most likely need to apply:
- SBA form 3172
- Verification for Tax Information: IRS Form 4506-T, completed and signed by Applicant. Completion of this form digitally on the SBA platform will satisfy this requirement.
Gross Receipts Documentation: Any of the following documents demonstrating gross receipts and, if applicable, eligible expenses
- Business tax returns (IRS Form 1120 or IRS 1120-S)
- IRS Forms 1040 Schedule C; IRS Forms 1040 Schedule F
- For a partnership: partnership’s IRS Form 1065 (including K-1s)
- Bank statements
- Externally or internally prepared financial statements such as Income Statements or Profit and Loss Statements
- Point of sale report(s), including IRS Form 1099-K
For applicants that are a brewpub, tasting room, taproom, brewery, winery, distillery, or bakery:
- Documents evidencing that onsite sales to the public comprise at least 33.00% of gross receipts for 2019, which may include Tax and Trade Bureau (TTB) Forms 5130.9 or TTB. For businesses who opened in 2020, the Applicant’s original business model should have contemplated at least 33.00% of gross receipts in onsite sales to the public.
For applicants that are an inn:
- Documents evidencing that onsite sales of food and beverage to the public comprise at least 33.00% of gross receipts for 2019. For businesses who opened in 2020, the Applicant’s original business model should have contemplated at least 33.00% of gross receipts in onsite sales to the public.
How to Calculate the amount you can receive:
For detailed information about how to calculate your award amount, please consult page 7-9 of the RRF program guide.
Calculation 1: for applicants in operation prior to or on January 1, 2019:
- 2019 gross receipts minus 2020 gross receipts minus PPP loan amounts
Calculation 2: for applicants that began operations partially through 2019:
- (Average 2019 monthly gross receipts x 12) minus 2020 gross receipts minus PPP loan amounts
Calculation 3: for applicants that began operations on or between January 1, 2020 and March 10, 2021 and applicants not yet opened but have incurred eligible expenses:
- Amount spent on eligible expenses between February 15, 2020 and March 11, 2021 minus 2020 gross receipts minus 2021 gross receipts (through March 11, 2021) minus PPP loan amounts
For those entities who began operations partially through 2019, you may elect (at your own discretion) to use either calculation 2 or calculation 3.
Maximum and minimum amounts
SBA may provide funding up to $5 million per location, not to exceed $10 million total for the applicant and any affiliated businesses. The minimum award is $1,000.
For the purposes of this program, gross receipts does not include:
- Amounts received from Paycheck Protection Program (PPP) loans (First Draw or Second Draw)
- Amounts received from Economic Injury Disaster Loans (EIDL)
- Advances on EIDL (EIDL Advance and Targeted EIDL Advance)
- State and local grants (via CARES Act or otherwise)
- SBA Section 1112 payments
What can I use the funds for?
Funds may be used for specific expenses including:
- Business payroll costs (including sick leave)
- Payments on any business mortgage obligation
- Business rent payments (note: this does not include prepayment of rent)
- Business debt service (both principal and interest; note: this does not include any prepayment of principal or interest)
- Business utility payments
- Business maintenance expenses
- Construction of outdoor seating
- Business supplies (including protective equipment and cleaning materials)
- Business food and beverage expenses (including raw materials)
- Covered supplier costs
- Business operating expenses
There are other issue you need to take into account.
We Standby Ready To Help You Apply
At Anchor Business Brokers, we are here to advise you – through the good and the hard. Let us help you through the application process. Contact us today.
Anchor Business Advisors