Restaurants who were among the most hit in the market last year could soon avail a grant up to $10 million for eligible expenses from February 15, 2020.
The Restaurant Revitalization Grant (RRG) which is part of the $1.9 trillion COVID-19 relief package will be voted during the week of February 22, 2021.
Here are important details you should know:
Businesses Who Are Eligible for the Grant
Any businesses with a place of business in which the public or patrons assemble for the primary purpose of being served food or drink are eligible. This include:
- Restaurant
- Food stand, food truck or food cart
- Caterer
- Saloon, Inn, tavern, bar, lounge or brewpub
- Tasting room or taproom
- Licensed facility or premise of a beverage alcohol producer where the public may taste, sample, or purchase products
Businesses Who are NOT Eligible:
- State or local government-operated businesses
- Businesses who own or operate (along with any affiliated business) more than 20 locations as of March 13, 2020. This is regardless of whether those locations are under the same or multiple names.
- Businesses who has a pending application for or was given a grant under section 324 of the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act
- Publicly-traded companies
Grant Amount and Maximum:
Eligible businesses can get $5,000,000 per location and up to $10,000,000 in total.
Grant Calculation:
If you’re eligible you can get a grant equal to your pandemic-related revenue loss. This is calculated by subtracting your 2020 gross receipts to your 2019 gross receipts. For instance, if your food cart chain’s gross receipts were $1.5 million in 2019 and $600,000 in 2020, then you are eligible for a $900,000 grant.
Businesses that started in 2019 vs 2020
For eligible businesses that started in 2019, you need to annualize your average monthly gross receipts for that year and compare it to your annualized monthly gross receipts for 2020 For eligible businesses that started operating in 2020, you need to subtract the qualified grant expenses to your 2020 gross receipts.
Grant Qualified Expenditures:
You can use the proceeds from the funds for qualified expenses related to your business operations from February 15, 2020 to December 31, 2021. This means you can apply for reimbursements for expenses incurred last year.
The following list of qualified expenses:
- Payroll
- Principal or interest payments on any mortgage (excluding prepayments)
- Rent expenses (not including pre-paid rent) and utilities
- Maintenance costs
- Supplies and PPE
- Food and beverage costs
- Covered supplier expenses
- Operational costs
- Paid sick leave
- Other expenses essential to maintaining the eligible business as determined by the SBA
Impact of Grant to EIDL and PPP
You can claim EIDL along with the Restaurant Revitalization Grant but wages used in calculating the ERC cannot be paid with the grant proceeds
For PPP, it is still unclear whether double dipping will be allowed when it comes to the ‘’qualified wage’’ but it is more likely they will exclude double dipping in the final version of the bill.
Although the provisions discussed above are yet to turn into law, the proposal seems to receive less resistance from both chambers of Congress. The passage of this bill will provide much-needed assistance to restaurants whom to this day still bear the effects of restrictions on public gatherings.
Levine and Associates will continue to get you updated on the latest developments of programs that matters to you. If you need assistance, book a free consultation with a professional CPA at https://calendly.com/levine-and-associates.