Guest Post: Anil Grandhi, Founder & CEO of AG FinTax
For restaurant executives across the nation, the historic Restaurant Revitalization Fund (RRF) signified a light at the end of the tunnel. The RRF has set aside $28.6 Billion to give to the restaurant industry, which was hit with tremendous hurdles by the COVID-19 pandemic. Of that money, $5 billion will go to businesses with gross receipts of $500,000 or less during 2019.
The RRF is from the federal government and tax-free, meaning you will never have to pay it back. The amount of aid received is calculated by finding your establishment’s pandemic-related revenue loss. For example, the difference between your 2020 gross receipts and your 2019 gross receipts will be your award estimate. Bringing in this grant will help get your business in a healthier financial state. There is potential for millions of dollars to be given to your restaurant to keep it operating the best it can. To note, if you applied and received any Paycheck Protection Program (PPP) loans, your award may be reduced by that amount.
To apply for this grant, you will need to prove a financial loss from the past year. If you weren’t in business for the entirety of 2019 or didn’t open until sometime in 2020, your calculation will be different. Nevertheless, your award will allow for some relief for a year when restaurants saw a huge loss. You can spend the grant money on certain business-related expenses. Eligible expenses include payroll for employees, rent, utilities, operational expenses, and paid sick leave. Other expenses might be items you had to purchase specifically because of the pandemic. For example, if your restaurant adapted to social distancing guidelines and opened outdoor seating, you can use the money awarded to you to buy outdoor furniture or for new construction to accommodate social distancing standards.
Another pandemic-specific expense you can pay with your RRF grant is personal protective equipment and cleaning supplies. While strict health codes and routine cleaning have always been a part of your business, attention to individuals and their cleanliness has never been as important as now. Things like masks and rubber gloves are used daily and must be replenished often, which accumulates a significant expense over time. Hand sanitizer at the door and frequent disinfecting are the new normal. For this reason, the RRF grant will revitalize your business so you can put funds towards other projects while still maintaining a clean, safe environment for your employees and customers.
Right at the start of the pandemic in the United States, big changes occurred for restaurants shutting their doors for months at a time. Without to-go or pickup orders, it became easy to get behind on your payments. Even with loyal customers, a small business could still fall behind with needing to keep up with PPE purchases. With the funding your establishment receives, you can pay off those early pandemic expenses and be in a better financial position going into the rest of 2021. It is important to keep in mind that there is a preallocated period of time in which you can use the money you receive. Eligible expenses are those which were incurred between February 15, 2020, to December 31, 2021.
The National Restaurant Association forecasts full-service establishments to rebound with a 10.7% rise in sales in 2021, with the help of the RRF grant. This positive statistic does not put the industry to where it was in 2019, but it will propel restaurant owners to a much better place. For small businesses, every bit of good news is welcome. Those without the existing infrastructure for contactless takeout or outdoor dining have had a significantly harder time surviving the pandemic, and this grant money will come as a huge relief. If it looks like your business needs some cushion to continue operations, you will want to apply for the RRF.
To qualify for the RRF grant, your establishment first has to be considered an eligible entity. This includes restaurants, food stands, food trucks, brewpubs, or places of business in which the public go-to for the primary purpose of being served food or drink. As an owner, you must own or operate 20 or fewer restaurants to be eligible. If your franchise has over 20 locations or is a publicly traded company, you are ineligible to apply for the grant. You must also submit a good faith certification that current economic conditions make the grant necessary for your business to operate and that you have not previously received money from the Shuttered Venue Operator (SVO) grant. The SVO grant is dedicated to live performance venues and theatres, which you may also qualify for if your establishment hosts events. However, you cannot receive both according to the government.
As the RRF grant application can be time-consuming and confusing, consider reaching out to a financial advisor with a history of working with those in the restaurant industry. AG FinTax has worked with hundreds of small business owners to help them receive $150 million in PPE loans. The same experts will be working tirelessly in the coming weeks to complete RRF applications for restaurant executives. AG FinTax can help you prepare everything you need to prove any loss of income to the Small Business Administration (SBA). The SBA sets the standard for who is eligible and what the funds can be used on, and may make adjustments to these terms and conditions as time goes on. This is why it is vital to work with a company like AG FinTax to make sure your small business gets what they need from this grant. Don’t miss out on your chance to receive significant aid that could make all the difference for your business.
AG FinTax’s expert accountants go through all your gross receipts to ensure you get the biggest return possible. This gives your business an advantage, assisting in maintaining daily operations without the worry of severely falling back on bills and other dues. As you navigate another year with restrictions on mask-wearing and capacity limits, you can rely on AG FinTax to guide you through the upcoming federal grant distribution and future tax preparation. Contact them today.