You must count all locations owned or operating under your Applicant business's EIN and your Applicant business's affiliates, even those that are not eligible for RRF.
Any entity that together with its affiliates owns or operates more than 20 locations, regardless whether the businesses operate under different names or are different types of business, is not eligible for RRF. For example, if your business and its affiliates own 16 dry cleaners and 5 restaurants, your business has 21 locations, which means your business is not eligible for RRF.
Each place where the Applicant or affiliates conduct sales from a permanent structure is counted as a location. If the Applicant or affiliates conduct sales from multiple permanent locations, each address is a separate location. For a caterer or a single business with multiple food stands, trucks, or carts, the physical location is where the business is headquartered (i.e., a business with one permanent structure and five food trucks will have one location; a caterer will have one location).
To preserve the limited resources available to the RRF program:
- Locations owned or operated by a single corporate group will count toward the 20 location maximum limit for eligibility and the $10 million aggregate limit on RRF funding. Businesses that are part of a single corporate group that in the aggregate own or operate more than 20 locations are not eligible for RRF funds.
- When individuals or entities directly or indirectly own or control multiple locations, all locations must be counted toward the 20 location maximum limit for eligibility and the $10 million aggregate limit on RRF funding. This includes any locations that operate under separate tax identification numbers or names, and applies whether or not ownership or control is through an individual, management or holding companies or other entities. All locations must be counted, even if they are not eligible entities for RRF. For the RRF program, SBA considers common stock owners and/or operators to be a de facto corporate group. This applies even to LLCs that are disregarded entities.
For example: An individual owns or controls 16 restaurants, each with separate tax identification numbers (e.g. EIN/SSN/ITIN) and 5 gas stations. Since all of these businesses (restaurants and gas stations) must be counted, none of the restaurants are eligible for RRF funds.
Your funding request is limited to $5 million per location and $10 million in the aggregate for the Applicant, any affiliated businesses, and within a single corporate group.
An affiliate business is a business in which the eligible Applicant business has an ownership interest of not less than 50 percent, or in which the eligible Applicant business has the contractual authority to control the direction of the other business, based on arrangements or agreements in place as of March 13, 2020.
Sole proprietors (and self-employed individuals) must count as affiliates all businesses reported on IRS Form 1040, Schedule C.
A holding company (which is a company that owns real estate for the benefit of an operating business) whose sole purpose is to hold the real estate for the eligible Applicant business should not be counted as a location or affiliate.
However, if Applicant business owns a holding company or management company that owns or manages a business other than the Applicant business, you must count these entities as separate affiliates and locations.
When you are filing out your RRF application, you will be asked if the Applicant has affiliates.
- You must select “yes,” if the RRF eligible applicant entity has an equity interest or right to profit distributions of 50% or greater of one (or more) other business entity; and/or
- You must select “yes,” if any owner of 20% or greater equity interest of the RRF eligible applicant entity has an equity interest or right to profit distributions of 50% or greater of one (or more) other business entity; and/or
- You must select “yes,” if the Applicant business is a holding company or management company that owns or manages a business other than the Applicant business, or if the Applicant business is held or managed by a company that owns or manages other businesses you must count these entities as separate affiliates and locations.