As weather gets warmer and vaccination rates increase, customers are eating and drinking outside their homes again. In March 2021, The Small Business Administration announced that its Restaurant Revitalization Fund (RRF) will provide funding to restaurants, bars, and other eligible businesses that have been hard hit by COVID-19 so that they can keep their doors open. Now that restrictions are being lifted, hard-hit restaurants and bars can use the much-needed capital to meet the surging demand.
While applications are now closed and some businesses have already started receiving funding, many are wondering what they can and can’t do with RRF grant money. In this article, we’ll tell you everything you need to know.
Allowable Use Of RFF Funds
Funds from the RRF grant are designated to be spent on any expenses that the SBA administrator “determines to be essential to maintaining the eligible entity.” This includes:
- Payroll costs (including paid sick leave)
- The principal or interest on a Mortgage
- Rent or lease payments
- Utilities
- Maintenance expenses, including any necessary renovations to accommodate health guidelines such as outdoor seating
- Supplies such as PPE and cleaning materials
- Food and beverage inventory
- Business debt (both principal and interest)
- Covered supplier costs
- Unforgiven portions of PPP loan
- Any other expenses the SBA deems as essential, such as: business-related credit card expenses, third-party delivery commissions, propane for food trucks, insurance for food truck vehicles, property taxes (when bundled with rent checks to landlord) and more.
- Operational expenses
Any expenses paid for with the grant must be incurred between February 15, 2020 and March 11, 2023. Any unused funds remaining at the end of the covered period must be returned.
Prohibited Use Of RRF Funds
While the RRF grant money can be spent on a wide variety of expenses, there are a number of things it cannot be used for:
- Qualified wages used to claim the Employee Retention Credit
- Mortgage prepayments
- Rent prepayments
- Business expansion -- i.e. you can use funds to repair/renovate an existing restaurant, but you cannot use funds to open up a new location
How to Spend Your RRF Grant Money
Now that you know the do’s and don’ts of RRF funding, here are some suggestions on ways to spend your RRF grant to improve your operation and better serve your customers.
Hiring
Dining room closures, capacity restrictions, and stay-at-home orders led to mass lay-offs as restaurants scrambled to protect their bottom line. But as restrictions are being lifted and more people are going out to eat, demand for in-person dining is soaring. In order to support this increase in demand, consider using your RRF grant money to hire and train additional front and back of house staff.
Outdoor dining
As customers return to restaurants, you’ll need to ensure that you have enough seating to serve them while abiding by any remaining social distancing guidelines. Plus, as the weather gets nicer, more customers want to dine outdoors where they can sit in the sun and enjoy the fresh air. Consider using your RRF funds to build or enhance an outdoor seating area, as it can help you improve the customer experience and increase profitability.
Inventory
With an influx of new customers as your restaurant reopens, you’ll need supplies and inventory to serve them. Consider using your funds to stock up on essential ingredients and other inventory in order to ensure that your menu is ready to go when customers arrive.
Technology
After spending months deliberating over how to best serve their customers once the pandemic is over, many restaurants are opting to spend their RRF grant funds on systems and technology that improve their existing operations.
A restaurant point of sale system helps you manage everyday tasks and streamline your restaurant operation, helping you to attract and retain customers and grow your business. With the right POS, you’ll be able to offer contactless payments, QR code menus, and other features that customers have become accustomed to over the course of the pandemic.
Delivery services
While many customers are looking forward to dining in restaurants once again, there is still a huge percentage of the population that prefers to stay in. Consider using your RRF funds to set up your own delivery service or sign up for third-party delivery services, especially ones that integrate with your POS. This way, your menu will be accessible to a much larger pool of potential customers, and existing customers can still enjoy your food when they aren’t in the mood to eat out.
Renovations
If you’ve been holding off on renovating your restaurant due to COVID, limited funding, or unclear reopening timelines, now might be a good time to start planning. As restrictions are lifted and customers return to restaurants, you want to ensure that you can provide the best experience possible for your guests. Using your RRF funds to renovate your restaurant can help you create a welcoming environment and stand out from your competition.
Personal Protective Equipment
As vaccinations rise and case counts fall, many people are starting to get more comfortable returning to normal. However, it’s still important to take precautions and necessary to ensure that your customers feel safe. Consider using your RRF grant money for personal protective equipment and staff training to ensure that you are implementing and maintaining all necessary public safety measures.
Conclusion
The Restaurant Revitalization Fund provides significant support to restaurants and other hospitality businesses across the country. As funds begin to be distributed, we hope that this article is able to provide some direction as to how you can (and can’t) spend your grant money. If you’re not using a restaurant point of sale system at the moment, now is a good time to start. Contact us to discuss whether RPOWER is right for you and find out how it can benefit your business.