Grant

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by David Klemt David Klemt No Comments

What is the ENTREE Act?

What is the ENTREE Act?

by David Klemt

United States Capitol Building on fifty dollar bill

Foodservice and hospitality operators are waiting for Congress to act and replenish the Restaurant Revitalization Fund.

Well, that replenishment may come in the form of a bill from Rep. Blaine Luetkemeyer (R-MO).

Congressman Luetkemeyer is a ranking member of the House Committee on Small Business.

Restaurant Revitalization Fund Empty

As operators know, it didn’t take long for the RRF to be depleted entirely.

The Small Business Administration opened the RRF application portal on May 3. Just 21 days later, the portal was closed to new applicants.

More than 60 percent of eligible applicants in need were not awarded grants from the $28.6 billion fund.

Clearly, that amount was nowhere near enough to meet the needs of our industry.

People have been calling for Congress to #replenishRRF ever since the RRF portal was closed on May 24.

Entrepreneurs Need Timely Replenishment for Eating Establishments Act

To be fair, Congress acted quickly to at least address the SBA’s shortcomings in handling the RRF.

Early in June, a bipartisan group introduced Restaurant Revitalization Fund Replenishment Act of 2021. Sens. Kyrsten Sinema (D-AZ) and Roger Wicker (R-MS), and Reps. Earl Blumenauer (D-PA) and Brian Fitzpatrick (R-PA) introduced the bill on June 3.

The bill seeks $60 billion to replenish the RRF and the funds would essentially come from “printing more money.”

However, Rep. Luetkemeyer introduced the Entrepreneurs Need Timely Replenishment for Eating Establishments Act on July 20.

The aptly (if unwieldy) named bill is also proposing $60 billion. However, the funds would come from a combination of sources.

ENTREE Act Funding

Both sources would pour unspent, previously allocated funds into the ENTREE Act.

Rep. Luetkemeyer’s bill proposes using state and local funds from the $1.9 trillion American Rescue Plan.

The ENTREE Act would also secure funds from Economic Injury Disaster Loans that have yet to be spent.

Currently, there’s no indication if Congress intends for these bills to somehow work together. Also, no date has been put forth regarding voting on either the Restaurant Revitalization Fund Replenishment Act or ENTREE Act.

However, we can put pressure on Congress by asking them to act quickly on these bills. So, let’s come together and contact our representatives—it can take just 30 seconds.

Image: Karolina Grabowska from Pexels

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by David Klemt David Klemt No Comments

We Need to Join Forces on the RRF

We Need to Join Forces on the RRF

by David Klemt

The United States Capitol Building with blue sky and white clouds in the background

It’s time for all hospitality professionals to come together and tell Congress to replenish the Restaurant Revitalization Fund.

Honestly, it’s well beyond time for us to all join forces and send our message to Congress.

Owners, operators, managers, and team members need to contact their representatives. Additionally, they need to encourage their friends and family members to do the same.

If we’re going to stop the damage to our industry, this needs to be done.

State of the RRF

Per this download from the National Restaurant Association, 455,304 eligible restaurants applied for RRF grants.

In total, 278,304 restaurants were awarded grants.

To be fair, that’s excellent news. And the Small Business Administration should be applauded for providing lifelines to nearly 280,000 restaurants.

However, the $28.6 billion the fund was seeded with was never going to be enough. Also, the SBA’s RRF portal was open nowhere near long enough.

Toward the end of May, Republican members of Congress sent a letter to the SBA. In it, they criticize the SBA for closing the portal so quickly.

To provide context, the RRF application portal was open a mere 21 days. Further context: the SBA made it clear before the RRF portal was opened that only priority applications would be processed for the first 21 days.

Replenish the RRF

According to the NRA, 177,000 eligible RRF applicants were not awarded grants.

That number represents a total of $43.6 billion in grants that haven’t been awarded.

So, not only does the SBA need to reopen the RRF, they need to replenish it with at least $43.6 billion. The NRA is asking that Congress refill the RRF with $50 billion.

We all know that the situation is dire. Per the NRA, 1.3 million jobs have been lost. Since the first 14 months of the Covid-19 pandemic, restaurants have lost $290 billion in sales. Obviously, that number has grown. At least 90,000 restaurants have either closed their doors long-term or forever.

However, this isn’t only about our industry. As the NRA shows, every dollar spent on this industry generates $2 for farming, baking, fishing, and other industries.

Looking at the numbers makes it clear: We all need to carve out the few minutes it will take to tell our representatives what we want.

What do we want? For the RRF to be replenished. Click here to tell Congress to replenish the RRF with at least $50 billion, and make sure to spread this message on social by using #ReplishRRF.

There are millions and millions of us in this industry. Now more than ever, we need to join forces and pull in the same direction.

Image: Louis Velazquez on Unsplash

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by David Klemt David Klemt No Comments

State of the RRF: By the Numbers

State of the RRF: By the Numbers

by David Klemt

Wad of dollar bills with red rubber band

The “tale of the tape” of the Restaurant Revitalization Fund tells a clear story: the RRF needs an injection of tens of billions of dollars.

Clearly, $28.6 was nowhere near enough to award every eligible restaurant and bar with a grant.

In fact, the RRF would need at least another $50 billion to serve all eligible applicants.

The Numbers

First, the Small Business Administration is to be commended for setting up the RRF portal, making the application process clear, and handling applications well.

However, there’s one glaring issue with the RRF and the review and awards process. I’ll get to that in the next section.

Per the National Restaurant Association, more than 362,000 applications were submitted via the RRF portal.

In total, the applications add up to $75 billion in grant requests. Again, the RRF was funded by the government with $28.6 billion. It doesn’t take a mathematician to see that the fund was severely underfunded.

Controversy

Last week, a number of Republican members of Congress sent a letter to the SBA. The gist of their message was that the RRF’s closure was premature. Therefore, the group concluded, non-priority applicants wouldn’t receive grants or even have the opportunity to apply for grants.

In the letter, which can be reviewed here, the authors also took shots at Democrats, the Biden Administration, and undocumented immigrants.

Setting politics aside, the announcement of the RRF’s portal closure was inarguably premature. The application process was first opened on Monday, May 3. For the first 21 days, the SBA announced that while all eligible entities could apply, only priority applicants would be processed and awarded grants.

However, the RRF portal closed to applications on Monday, May 24…21 days after it first opened. The members of Congress who penned the letter to the SBA have a point: the SBA closed the RRF portal after only operating within the priority window.

Now What?

There’s no other way to put this: The RRF needs more funding.

Essentially, it needs twice the funding it had when it was first seeded. There’s zero guarantee that Congress will address this matter, but at least a handful of lawmakers are aware of the dire situation.

Two weeks ago, the NRA launched a petition urging the government to replenish the RRF. Of course, the RRF also needs to be reopened for applications, and the application process needs to be open to all eligible applicants.

There’s no promise the petition will achieve the desired result but we must do something. Click here to sign the petition and tell Congress the RRF needs to be replenished and reopened.

Image: Karolina Grabowska from Pexels

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by David Klemt David Klemt No Comments

Tell the Government to Refill the RRF

Tell the Government to Refill the RRF

by David Klemt

Piggy bank wearing a face mask

The National Restaurant Association is urging restaurant, bar and other hospitality operators to sign a Restaurant Revitalization Fund petition.

Put concisely, the NRA’s petition asks the federal government to replenish the RRF.

Grants are going out and there’s no guarantee the $28.6 billion fund is enough for every eligible business. Therefore, the NRA is calling for more funds.

The Petition

Now, there is good news regarding the RRF. Per the Small Business Administration, 21,000 applicants have received $2.7 billion in grants.

However, when one considers that well over 180,000 grant applications were submitted within the first 48 hours, the $28.6 billion will more than likely run out before every eligible business receives a grant. The first 16,000 grants alone total $2 billion.

According to one source, priority applications carry a value of approximately $29 billion. Obviously, that’s more money than is in the fund.

And that’s only the value of applications receiving priority for the first 21 days. Clearly, more funding is necessary.

As the NRA’s petition states, “We are urging policymakers in Washington—from the White House to Capitol Hill—to replenish the RRF to maximize relief for small independent and franchise restaurant operators. Americans can’t wait to get back into their favorite restaurant with their family and friends, and the federal government can play a key role in making that a reality.”

Click here to sign the NRA’s petition. Our industry is the hardest hit by the pandemic and every eligible business deserves funding.

It’s not that this industry isn’t grateful—it’s that hundreds of thousands of businesses are fighting to stay alive. They’ve been doing so for more than a year.

The RRF

The SBA’s RRF portal link is https://restaurants.sba.gov. Alternatively, operations can use a POS that’s an SBA partner to apply. Partner systems include Clover, NCR, Square, and Toast.

According to the SBA website, certain eligible entities will be given priority.

For the first 21 days the application process is open, priority will go to small businesses with a minimum of 51 percent ownership by women, veterans or socially disadvantaged people.

The application process should open to every applicant on Monday, May 24. For more in-depth information, operators can follow the appropriate links to review the Small Business Administration’s RRF program guide and sample application.

Applicants do not need to register with SAM.gov (System for Award Management) or provide DUNS or CAGE identifiers.

To calculate a grant amount, an applicant subtracts 2020 gross receipts from 2019 gross receipts. Applicants must deduct first-draw PPP and second-draw PPP loans. Any economic disaster loans—Economic Injury Disaster Loans, for example—are not RRF deductions.

Again, please click here to sign the NRA’s petition today.

Image: Konstantin Evdokimov on Unsplash

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by David Klemt David Klemt No Comments

RRF Applications Open Monday

RRF Applications Open Monday

by David Klemt

Modern neon sign hanging in window

In long overdue but very welcome news, the Small Business Administration’s RRF portal opens to accept applications on Monday.

Operators and business owners will be able to register this Friday, April 30.

We definitely recommend doing so to make the application process simpler and (hopefully) less frustrating on Monday, May 3.

What You Need to Know

Mainly, the following: The SBA’s RRF portal link is https://restaurants.sba.gov. It would probably be a good idea to go ahead and bookmark that site now.

Alternately, operators using an SBA POS partner to apply. Partner systems include Clover, NCR, Square, and Toast.

Per the SBA, operators will be able to register via the website beginning at 9:00 AM EST on Friday. Again, it would be wise to plan on doing exactly that.

Anything that can be done to speed up the application process opening Monday should be done.

According to the SBA website, certain eligible entities will be given priority. For the first 21 days the application process is open, priority will be granted to small businesses with a minimum of 51 percent ownership by women, veterans or socially disadvantaged people.

However, all eligible owners and operators should register on Friday and apply on Monday. Doing should, in theory, help applicants secure their grants in a more timely manner.

RRF Preparation

The SBA’s Restaurant Revitalization Fund portal opens at noon ET on Monday. It’s best to prepare as much as possible as it’s likely applicants may find themselves in a queue depending upon traffic.

Operators can calculate their grant amounts with the following equations for applicants:

  • in operation prior to or on January 1, 2019: 2019 gross receipts minus 2020 gross receipts minus PPP loan amounts.
  • that began operations partially through 2019: (Average 2019 monthly gross receipts x 12) minus 2020 gross receipts minus PPP loan amounts.
  • who began operations on or between January 1, 2020 and March 10, 2021: Amount spent on eligible expenses between February 15, 2020 and March 11, 2021 minus 2020 gross receipts minus 2021 gross receipts (through March 11, 2021) minus PPP loan amounts
  • not yet opened but have incurred eligible expenses: Amount spent on eligible expenses between February 15, 2020 and March 11, 2021 minus 2020 gross receipts minus 2021 gross receipts (through March 11, 2021) minus PPP loan amounts

Note: Entities who began operations partially through 2019 may elect, at their own discretion, to use either calculation two, three or four above.

For further guidance and to prepare as much as possible, please click here for the SBA’s RRF guide, and click here to review the sample application.

The Independent Restaurant Coalition also has a handy checklist posted to Instagram:

Good luck!

Image: Prateek Katyal on Unsplash

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by David Klemt David Klemt No Comments

Live Event Venues Can Apply for Relief

Live Event Venues Can Apply for Relief

by David Klemt

Bokeh photograph of condenser microphone

Live event venue and movie theater operators can once again apply for relief grants via a Small Business Administration portal today.

This is big and welcome news for businesses that are among the hardest-hit due to the pandemic. However, the portal has yet to open at the time of publication.

It remains to be seen if the issues plaguing the SBA’s portal are no more. It also casts some doubt on a glitch-free process for Restaurant Revitalization Fund applicants.

SVO Grant Portal Problems

Today’s reopening of the Shuttered Venue Operators Grant portal is nearly three weeks in the making. A message on the homepage states that the portal has undergone “rigorous testing” to prevent further issues.

On April 8, the day the website opened for applications, it was shut down due to a “technical glitch.” Applicants are now 18 days behind in terms of applying for and receiving relief.

Unfortunately, the delay is more bad news for live event and movie theater operators. The Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act became law on December 27, 2020. That means more than 120 days will have passed just to open the application process today.

SVO Grant Details

The Shuttered Venue Operators Grant program contains more than $16 billion. There is a $10-million-dollar cap on single grants.

Importantly, eligible entities in operation on January 1, 2019, will receive grants equal to 45 percent of their 2019 gross earned revenue or $10 million. For eligible entities that began operation after January 1, 2019, grant amounts will be for the average monthly gross earned revenue for each full month of operation during 2019 multiplied by six or $10 million.

Eligible applicants include:

  • Live venue operators or promoters
  • Theatrical producers
  • Live performing arts organization operators
  • Museum operators
  • Motion picture theater operators, including owners
  • Talent representatives

Notable requirements include the following:

  • An eligible entity must have been in operation as of February 29, 2020; and
  • entities that received PPP loans on or after December 27, 2020, will have the SVO grant reduced by the PPP loan amount.

Be Ready

If you’re an operator applying for an SVO grant, be sure you’re ready to apply today.

There is a checklist for applicants on the SBA website. Click here to access and review it. There are several forms operators will need to fill out and include in their application, such as SBA Form 1623 and SBA Form 1711.

Necessary financial documents include 2019 tax returns for businesses in operation in 2019, 2020 tax returns for businesses that have filed 2020 taxes, and 2018 tax returns for non-profit applicants that have yet to end their 2020 fiscal year. Businesses that declared Chapter 11 or Chapter 13 bankruptcy must include pertinent documents.

Additionally, there are also business-specific documents required for live venue operators or promoters; theatrical producers; live performing arts organization operators; movie theater operators; and museum operators.

Image: israel palacio on Unsplash 

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by krghospitality krghospitality No Comments

SBA Releases RRF Guide and Forms

SBA Releases RRF Guide and Forms

by David Klemt

"This is the sign you've been looking for" white neon sign on brick wall

Operators in the United States are nearing the opening of the Restaurant Revitalization Fund application process.

The Small Business Administration’s RRF program guide and sample application are now available.

Let’s jump in!

RRF at a Glance

In simple terms, the RRF is the most targeted relief the industry in America has received since the pandemic took hold.

Eligible entities apply for a tax-free grant equal to the amount of a their pandemic-related revenue losses.

To calculate a grant amount, an applicant subtracts 2020 gross receipts from 2019 gross receipts. Applicants must deduct first-draw PPP and second-draw PPP loans, even if they’re paid back or forgiven. Any economic disaster loans—Economic Injury Disaster Loans, for example—are not RRF deductions.

Per the SBA, operators do not need to register for a System for Award Management (SAM.gov) account, meaning they no longer need to acquire a DUNS number.

RRF Eligibility

As the SBA’s RRF program guide states, eligible businesses A) must not be closed permanently, and B) are places where customers gather primarily to consume food or drink. Such entities include:

  • restaurants;
  • bars;
  • saloons;
  • lounges;
  • taverns;
  • food trucks, carts and stands;
  • snack and non-alcoholic beverage bars;
  • licensed facilities or premises of a beverage alcohol producer where the public may taste, sample, or purchase product; and
  • other similar places of business in which the public or patrons assemble for the primary purpose of being served food or drink.

However, that’s in no way the entire list of eligible businesses. Bakeries, breweries, microbreweries, brewpubs, taprooms, distilleries, wineries, and tasting rooms are eligible if they can provide documentation (which must accompany their application) that:

  • on-site sales to the public comprised at least 33% of gross receipts in 2019; or
  • original business model should have contemplated at least 33% of gross receipts in on-site sales to the public if they’ve yet to open or opened in 2020.

Interestingly, it’s possible for an inn to be eligible for the RRF. Such a business is subject to the same eligibility requirements as bakeries, breweries, etc.

Eligible Expenses

Businesses that receive an RRF grant may use the funds for eligible expenses during their covered period. That timeframe is the “period beginning on February 15, 2020 and ending on March 11, 2023.” Should the business close permanently, that period will end when the business permanently closes or on March 11, 2023, whichever occurs sooner.”

A grant recipient must return any funds to the Treasury if they’re unable to use for eligible expenses by the end of the covered period.

So, which expenses are eligible per the SBA for the RRF program? Below is a short list of eligible expenses:

  • Payroll costs (sick leave, costs for group health care, life, disability, vision, or dental benefits during periods of paid sick, medical, or family leave, and group health care, life, disability, vision, or dental insurance premiums).
  • Payments on any business mortgage obligation, both principal and interest (Note: Excludes any prepayment of principal on a mortgage obligation).
  • Business rent payments, including rent under a lease agreement (Note: Excludes any prepayment of rent).
  • Construction of outdoor seating.
  • Business supplies (including protective equipment and cleaning materials).

For the full list of eligible expenses and many more RRF details, please click here to download and view the entire SBA RRF program guide. To view the sample application and prepare for the process to begin, click here.

Disclaimer

This content is for informational purposes only, and should not be used as legal, tax, investment, financial, or other advice. This article does not constitute professional and/or financial advice, nor does any information constitute a comprehensive or complete statement of the matters discussed or the law. This information is of a general nature and does not address the circumstances of a specific individual or entity. The reader of this information alone assumes the sole responsibility of evaluating the merits and risks associated with the use of any information before making any decisions based on such information.

Image: Austin Chan on Unsplash 

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