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Restaurant Revitalization Fund (RRF) program
First off, the funds are expected to be spent before the end of 2021, as an annual report to the SBA will be required at some point in the future. We are still waiting for guidance from the SBA regarding what this annual report will look like. It may make sense to draft a spending plan or budget to make sure all of the funds are spent on time and in accordance with the program rules. GP CPA can help you with this planning, so you can prevent a surprise surplus of funds. Spend wisely and timely!
Now, onto the qualified use of the funds received! Certain items have been bolded or noted for your attention.
- First and foremost, payroll expenses are covered expenses under the RRF. The details of what “payroll” expenses include are:
- Wages paid to employees;
- sick leave;
- costs related to the continuation of 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.
- Business operating expenses. Broadly defined as “business expenses incurred through normal business operations that are necessary and mandatory for the business.” Business operating expenses do not include expenses that occur outside of a company’s day-to-day activities. Examples are
- a. Rent;
- b. Equipment purchasing (see below for exceptions);
- c. Supplies & inventory; and
- d. Services (accounting, training, legal, marketing, insurance, etc.).
- Payments on any business mortgage obligation, including both principal and interest, but not principal prepayments.
- Rent payments made under a lease agreement (again, not prepayments)
- Utilities. Defined as “for the distribution of electricity, gas, water, telephone, or internet access, or any other utility that is used in the ordinary course of business for which service began before March 11, 2021”
- Maintenance expenses. This list is more specific and excludes expansion activities. The maintenance expenses that are valid uses of RRF funds are:
- Maintenance on walls, floors, deck surfaces, furniture, fixtures, and equipment;
- Replacement of furniture, fixtures, and equipment (FF&E); and
- Certain food truck maintenance costs.
- Construction of outdoor seating
- Supplies, including PPE and cleaning materials
- Normal food and beverage inventory expenses, including raw materials for beer, wine, or spirits
- Covered supplier costs. This term is defined as:
- a. “an expenditure made by the eligible entity to a supplier of goods for the supply of goods that: Are essential to the operations of the entity at the time at which the expenditure is made; and
- b. “Is made pursuant to a contract, order, or purchase order in effect at any time before the receipt of Restaurant Revitalization funds;
- c. Or “with respect to perishable goods, a contract, order, or purchase order in effect before or at any time during the covered period”
As more information becomes available, we will update this post. Contact us with any questions, particularly if something seems a little “gray” and you want to clarify if you can spend RRF funds on something for your restaurant.
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