Why is it so important for underrepresented U.S. business owners to take advantage of benefits like the Restaurant Revitalization Fund? Everyone deserves the American Dream.
- A majority of U.S. business owners are white. They own over 2.5x more businesses than minorities do (African Americans, Native Americans, Asian Americans, and Hispanic Americans combined) and make almost 7.5x more in receipts.
- A majority of U.S. business owners are also men. They own almost 1.5x more businesses than women do and make over 6x more in receipts.
The Restaurant Revitalization Fund is currently open to women, minority, and veteran-owned businesses as a priority until May 21st. If you fall into any one of these categories, has your accountant proactively spoken to you about this? If not, keep reading for details.
Changes in Public Comfort Levels in Dining Out
A November 2020 U.S. study on Statista.com showed that while 27 percent of people said they would be willing to go out to eat by mid-November 2020, 26 percent of people said they wouldn't be willing to go out to eat until at least May 2021, "showing a divide in public comfort levels."
May 2021 has just now arrived, and a better future for restaurants is on the horizon. However, with a large portion of Americans having avoided restaurants until now, 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 the RRF as a program that provides funding to help restaurants and other eligible businesses, such as food trucks, caterers, bars, and bakeries, 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.
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 2019 gross receipts - 2020 gross receipts - PPP loan amounts
If your business started partially through 2019:
(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:
Amount spent on eligible expenses between February 15, 2020 and March 11, 2021 - 2020 gross receipts - 2021 gross receipts (through March 11, 2021) - PPP loan amounts
What can you use your funds for?
Funds may be used 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
Who is eligible for priority application?
"[Until May 21st], 2021, SBA will fund applications where the applicant has self-certified that it meets the eligibility requirements for a small business [at least 51%] owned by women, veterans, or socially and economically disadvantaged individuals." After this time, all other applicants are accepted - but only until funds are exhausted. You will want to apply as soon as possible. Applications will be processed in the order in which they are approved.
The Small Business Administration also shares some statistics; "As firm size increases from firms without employees (nonemployers) to firms with employees (employers), women, African-American, and Hispanic owners become less represented... Foreign-born Americans represent a similar share of owners and employees."
While more businesses are nonemployers, most business comes from employers. Minorities tend to have smaller and younger businesses. This shows the beginning of inequalities in the U.S. small business community, "hinting at survival issues." Veterans also own a small percentage of nonemployers and employers, but they do tend to be older than other businesses.
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 time is running out! We hope to hear from you.