Everything You Need to Know About the New Restaurant Revitalization Grant
There is no question that the COVID-19 pandemic greatly influenced the future, and present, practices of businesses in the food and drinks industry.
With fewer people going out, restaurants and bars faced fewer and fewer possible ways to make money for their businesses to thrive. Luckily, the Restaurant Revitalization Grant is coming.
Are you eligible for the grant? If so, what are you allowed to spend the money on? It's difficult to plan ahead if you're not sure what you can do with the grant money or how it will impact the rest of this year's revenue.
If you are interested in learning about the requirements for the Restaurant Revitalization Grant, keep reading below.
What Is the Restaurant Revitalization Grant?
The Restaurant Revitalization Grant is part of the RESTAURANTS Act of 2021. It is a grant designed to help struggling businesses that have been impacted by COVID-19 restrictions.
The grant is designed to cover specific types of expenses that businesses have or will have between February 15, 2020 and December 31, 2021. The end date may change at the discretion of the government, but for now, it is set for the end of this year.
Businesses that don't spend all of the funding they receive will have to return the portion that isn't used. If your business goes out of business before the period of time specified ends, you also have to return the money to the government.
What Is the RESTAURANTS Act?
As part of the American Rescue Plan Act of 2021, the RESTAURANTS Act became law on March 11, 2021. It is a $28.6 billion fund that provides assistance to businesses in the food and drink industry.
This comes as a result of these businesses facing an incredible amount of revenue loss due to the COVID-19 pandemic.
How Do You Know if Your Business Is Eligible?
Businesses that are going to be eligible for this grant fall into specific categories. Those categories include:
- Food truck
- Food stand
- Catering company
- Food cart
- Licensed facility
- Tasting room
- A facility that allows tasting, sampling, or sale of food or drink
If your business falls into one of these general categories, or it is very similar and people come to your business for food and drinks, you are eligible for this grant.
Luckily, the requirements seem to span over a wide variety of food and drink industry business types.
If you also received loans through the Paycheck Protection Program, you will be eligible for this grant as well.
The Small Business Administration will disperse the grants to eligible businesses, and the start date for applications will be in April 2021.
Information businesses will need regarding this grant is going to be available on the SBA website. If you are eligible for this grant, it is a good idea to continue checking the COVID-19 relief options portal on the Small Business Administration website.
How Much Money Will You Get?
The amount of money that a business can receive can be as high as $10 million but is limited to $5 million per physical location if 20 or fewer establishments exist. This is dependent on whether your business was in operation for all of 2019 and 2020 as well.
Funds from the grant are not going to be taxed like regular income would be.
The money that your business is eligible for will be equal to the revenue you had in 2020 minus the revenue from 2019. The idea is that you'll be able to make up for the loss in revenue that you likely would have had if 2020 had been like 2019 (without the pandemic).
If you opened your business for only part of 2019, the maximum amount you'll receive will be the average of your monthly gross receipts instead of the total yearly revenue.
If you opened your business in 2020, your grant money could be equal to the number of expenses that are considered eligible since you've been open.
What Can You Spend the Money On?
The grant money has to be spent on specific expenses that are directly related to your business. Eligible expenses include:
- Paid sick leave
- Payments on business mortgages
- Operational expenses
- Rent payments
- Supplier costs
- Utility payments
- Other expenses SBA deems essential to business function
The expenses that you are allowed to cover have to fall between the previously mentioned dates of February 15, 2020 and December 31, 2021.
What Else Should You Know?
Assistance for struggling business owners is finally about to be available, so if you want to receive the grant, there are things that you need to do first so that your business can be located by the government process.
To prepare for the application, you should be registered with the System of Award Management. If you haven't done so already, it's not too late to do it now.
You'll need to create an account on their website, sign up for your DUNS number, and finish registration entirely before you can receive the grant. This can take as long as 2 weeks to process.
You also may want to take the time to speak with your accountant regarding necessary paperwork showing revenues and losses in 2019 and 2020. This can help you make sure that you have clear proof of the impact COVID-19 had on your business.
Help for Small Businesses Is Here
This grant money is coming at the perfect time for businesses in need.
If your business will be receiving the Restaurant Revitalization Grant, it's a good time to consider what you will spend it on and make a plan for your business.
Contact us today to learn more about how we can help you prepare.