A lot of businesses got stiffed on the Restaurant Revitalization Fund (RRF) Grants. After the program closed on May 3rd, less than 10 days after the launch of the program, the Small Business Administration ended the program on Jul 3, 2021, claiming they had released the full $27.6B the organization was allocated. More recently, the list of recipients was released, sending many independent restaurant owners into a fury, as the receipts on the top of the list were large franchises of Dunkin Donuts, Denny’s and Panera, rather than actual independent restaurants. In the end, 5% of the RRF receipts, ended up with 40% of the money.
That leaves many small business owners out of the pool. A staggering $60B in applications is left unfunded. That begs the question, what options are left for those that weren’t lucky enough to receive RRF money?
EMPLOYER RETENTION TAX CREDITS (ERTC)
The ERTC is the red-headed stepchild of pandemic relief. The program was quickly shoved in the corner in favor of the Paycheck Protection Program. However, now that time has passed and the PPP has been fully utilized, business owners and accountants are turning their attention to this program. It works in tandem with the PPP (but you can’t use the same money on both programs, effectively double-dipping), but you can earn a credit of up to 70% of wages per quarter, with a limit of $10k per employee per quarter for 2021.
Do I qualify for ERTC?
This setup is similar to the PPP programs.
If you have less than 500 full-time employees
And:
Operations either fully or partially suspended due to orders from a governmental authority due to COVID-19, OR;
The business experienced a significant decline (50%) in gross receipts when comparing either the calendar quarter or the prior quarter to the corresponding quarter in 2019.
Well, then you’re in luck, you’re eligible for the ERTC.
How do I apply?
Reach out to your accountant. This is an absolutely BRUTAL process to calculate these numbers, and it's absolutely not something you should do only on your own. Your accountant should be able to help with this, but be patient, as they have a lot of work on their plate already. Ask them honestly if they are going to be able to handle it, and if not, reach out to other accountants to get it done.
The Economic Impact Disaster Loan (EIDL)
There is a staggering $30B remaining in the Economic Impact Disaster Loan. Qualified businesses (which is basically anyone who was open prior to 2020) can take advantage of this program. While the other options have been either grants or tax credits, this program comes in the form of a loan through the Small Business Administration. Applicants can qualify for up to a $500k loan at 3.75% for 30 years. In the world of commercial loans, this is a rock bottom rate and a great term. There are some strings attached to this loan (can’t be used for new equipment or expansion of the business), but, if you’re willing to take on some debt, you might as well take advantage of this cheap money.
The calculation for the loan amount is your 2019 Gross Profit (Revenue - Cost of Goods Sold).
You can apply for this loan here, and if you have all the information, it takes about 20 minutes.
But what about the Restaurant Revitalization Fund?
If you’re still holding out for the RRF, don’t. Simply put, the political capital behind replenishing the fund is few and far between. The Independent Restaurant Coalition is putting pressure on Capitol Hill, but it doesn’t seem like politicians are interested in replenishing the fund now that businesses are opening back up. There are some clever bills out there, looking to reallocate unused aid, such as the ENTRÉE Act, but there isn’t much news on the progress of the bill. In short, plan for the worst, and hope for the best.
Also, call your state representative and demand support.
