Because women, veteran, and minority-owned restaurants are a small portion of the restaurant industry, they were granted a priority application period for the Restaurant Revitalization Fund.
The priority application period for underrepresented restaurant owners came to a close on May 21st, and now the fund is open to all restaurant owners on a first come, first served basis. If you're in the food and beverage industry, has your accountant proactively spoken to you about this? If not, keep reading for details.
Changes in Public Comfort Levels in Dining Out
A previous blog post mentioned a U.S. study on Statista.com that showed 27 percent of people were willing to go out to eat by mid-November 2020, but 26 percent of people said they wouldn't until at least May 2021. Now that May 2021 is here, things can start to go back to normal. However, some financial catch-up is needed. That's where the Restaurant Revitalization Fund comes into play.
What is the Restaurant Revitalization Fund?
The Small Business Administration explains that the RRF provides funding to help restaurants keep their doors open. It's meant to provide funding equal to their pandemic-related revenue loss (see below), and recipients aren't required to repay it if funds are used for eligible uses (see below) by March 11, 2023.
The application period is based on the amount of funding available. Your accountant should be taking the time to set up a meeting with you to take advantage of this opportunity. Applications will be approved on a first come, first served basis, so don't wait!
What types of food and drink operations can apply?
Restaurants
Food stands, food trucks, food carts
Caterers
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
How much money can you be approved for?
It all depends on how long your business has been in operation. Here are some formulas for your business's RRF funding; grab your calculator!
If you've been open since or before January 1, 2019, your RRF funding = 2019 gross receipts - 2020 gross receipts - PPP loan amounts
If your business started partially through 2019, your RRF funding = (average 2019 monthly gross receipts x 12) - 2020 gross receipts - PPP loan amounts
If you began operations on or between January 1, 2020 and March 10, 2021 OR have not yet opened but have incurred eligible expenses, your RRF funding = amount spent on eligible expenses between 2/15/2020 and 3/11/2021 - 2020 gross receipts - 2021 gross receipts (through 3/11/2021) - PPP loan amounts
What can you use your funds for?
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
Ready to learn more?
As stated at the beginning of this article, you may want to contact us if your accountant has not spoken to you about the RRF yet. We can make you a priority, and you need that in first come, first served situations like this!
