The restaurant industry has been one of the hardest-hit by COVID. With quarantine preventing customers from eating in restaurants, restaurants sales declined. As a result, an estimated 110,000 food and beverage establishments closed in 2020.
Communities supported their local businesses by ordering takeout, but many restaurants are still in the red. With little help from the government going toward restaurants, they’ve continued to struggle.
Fortunately, restaurants are getting some help from the Small Business Association’s Restaurant Revitalization fund.
If you’ve received a grant via the restaurant revitalization fund, you probably wonder how to spend that money effectively. Read on to learn what to do with your grant money.
Restaurant Revitalization Fund Update
American Rescue Act set aside funds for the Small Business Association to create a new restaurant grant to aid struggling restaurants. The SBA Restaurant Revitalization Fund helps businesses pay for expenses they’ve incurred during the COVID pandemic. The grant prioritizes small businesses, especially those owned by women, veterans, and individuals in disadvantaged groups.
The restaurant revitalization fund application opened on May 3, 2021. Demand for grants has been high. More claims were filed than money is available.
What to Do After Receiving Your Restaurant Revitalization Fund
When you applied, you calculated grant funds based on your 2019 income or your business opened in 2020, based on your current expenses. The Small Business Association has rules about how the grant money can be used. Manage your granny money by doing the following.
Spend on Back Payments
The SBA states that the grant must be used on expenses directly relates to your business. Some costs that are eligible include:
- Payroll
- Mortgage or Rent Payments
- Sick Leave Payments
- Inventory Costs
- Utility Payments
- Maintenance
It’s best to pay for items you are behind on to ease your financial strain. Operational expenses will only continue to accumulate if you don’t pay them. As dine-in returns, you will be better positioned to meet these expenses as sales increase.
The grant also states you can use funds for other uses if deemed essential for business functions. For example, you could use the funds to expand outdoor seating to help serve customers safely during the pandemic.
Keep Records of Expenses
Regardless of what you end up spending your grant money on, you’ll want to keep receipts. The grant allows you to cover expenses from February 2020 to the end of 2021. If you don’t spend all your grant money by the end of the year, you will have to return the extra money.
Be mindful about spending the money. You might be tempted to start spending the money on whatever you can before the deadline, but you must meet the requirements.
Prepare Any Tax Information
The federal government has deemed that these grants are not taxable, so you don’t need to record your grant money in your yearly income. However, some states may require you to pay taxes on the grant money. So prepare your tax documents with this in mind.
Use Your Restaurant Revitalization Grant Wisely
The Restaurant Revitalization fund can help your business relieve some of the havoc COVID has wrought on the restaurant industry. Spending it can help ensure your business stays open and positioned for success. However, be mindful of how you spend it to follow regulations and tax and reporting requirements.
Are you interested in more ways to help your business? Check out more business articles and tips on our website.
Read Also: Office Aesthetics: The Latest Design Trends for the Workplace
