HERG Round 2 - Hospitality Economic Resiliency Grant

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APPLICATION PERIOD IS NOW OPEN - CLICK HERE TO APPLY 

Application period closes February 25th - 5:00 p.m. CST

The Consolidated Appropriations Act allowed continued spending of previous Cares Act dollars. Following review by the Office of Management, Legislative Counsel and Budget and the Attorney General’s Office, it was determined that ND Commerce was authorized to spend these funds from 2020 programs authorized by the Emergency Commission and Budget Section. As a result, the Department determined the hospitality sector has continued needs, therefore, another round of Hospitality Emergency Resiliency Grants (HERG) would be available.

This includes restaurants, bars, breweries, cafes and similar on-site dining establishments.  Additionally, the HERG Round 2 will also focus on entertainment venues to include movie, drama or music theaters and facilities used to host community and private events; including indoor recreation entertainment (e.g. bowling alleys, indoor golf clubs, and indoor trampoline parks) where membership/class fees do not exceed 51% of revenue.

You may only fill out ONE application and will be eligible for up to $25,000 for one eligible location, up to $50,000 for two eligible locations, and up to $75,000 for three or more eligible locations. If you receive a grant for more than one location, you cannot spend more than $25,000 per location. An eligible location must meet business eligibility requirements as listed at https://belegendary.link/HERG and is defined by a customer facing marketplace. List all locations in which your ownership is 50% or greater, regardless of whether business has a separate EIN. Applicant must list each business under this guideline and will be awarded according to the $25,000, $50,000 and $75,000 maximum rule.

If an eligible entity received funding in HERG Round 1, they are capped at $25,000; for example, entities that received $25,000 are entitled to $0; an entity that received $15,000 would be eligible for up to $10,000 and an entity that received $5,000 would be eligible for up to $20,000. The same concept applies to multiple entities as the cap remains $75,000 with $25,000 per facility using the same logic. There can be no single entity that receives in excess of a total of $25,000 or group of businesses with combined ownership structure involving multiple eligible entities that receive in excess of $75,000.

The HERG Round 2 will be used to reimburse these entities for costs in payroll, rent, mortgages that have no affiliation with BND products; marketing expenses, utilities, and insurance.   

Hospitality Economic Resiliency Grant (HERG) Fact Sheet

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Special Business Briefing - January 28th, 2021 - Highlighting the second round of the Hospitality ERG (HERG)

Please note: Edit to the video presentation at marker 3:23 - it is stated that the incurred expenses must be from March 27, 2020-date of application.  This was announced inaccurately and should be the following: Expenses MUST have incurred from March 27, 2020 through December 29, 2020. 

Presentation

Video Presentation

For past applicants who want to view their previously submitted grant applications for ERG, HERG (Round 1) and PHERG, click here to login

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BUSINESS ELIGIBILITY

HERG FAQ's

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Hospitality ERG (HERG Round 2), which will focus on businesses in the hospitality sector that were closed on March 13, 2020, as a result of Executive Order 2020-06, including restaurants, bars, breweries, cafes and similar on-site dining establishments.

Many of these businesses continue to suffer from the continued impact of the 2019-nCov/COVID-19 (COVID-19) pandemic. While these businesses face dramatic declines in revenue, they continue to be pillars in both rural and urban communities across North Dakota.

Eligible entities will also include entertainment venues to include movie, drama or music theaters and facilities used to host community and private events; include indoor recreation entertainment, e.g. bowling alleys, indoor golf clubs, and indoor trampoline parks where membership/class fees do not exceed 51% of revenue.  HERG will help businesses survive in the midst of the COVID-19 pandemic.

Hotels with restaurants, bars, coffee shops and or banquets/meeting space may apply for a grant using the operational expenses from those specific operations.  Receipts must clearly show this connection, such as payroll, rent, mortgages that have no affiliation with BND products; marketing expenses, utilities, and insurance. Limited service hotels, without dedicated group space or a restaurant, unfortunately are not eligible for the grant.  Complimentary breakfasts would not qualify as a restaurant.  

Eligible expenses must have been incurred on or after March 27, 2020, and no later than December 29, 2020.

Funds received are considered 1099 reportable income.  Click here for more information from the IRS.

Please note, there is NO APPEALS process for the HERG Round 2 grant program. Providing all documentation requested and appropriate justification for each expense item will ensure your best chance for success with the grant program.  

Who's Eligible

The grantee must be:

  • A restaurant (food trucks included) - to include food services and drinking establishment that derive a minimum of 51% of their sales from prepared food/drink and must certify that 75% sales were derived in ND, as well as a current food establishment license.
  • A bar or lounge with a current on-sale liquor license issued by the appropriate legal entity that derive a minimum of 51% from on-site sales.
  • An entertainment venue to include movie, drama or music theaters and facilities used to host community and private events; include indoor recreation entertainment, e.g. bowling alleys, indoor golf clubs, and indoor trampoline parks where membership/class fees do not exceed 51% of revenue.
  • A production company that provides technology and audio-visual services to meetings and events; and must certify that 75% sales were derived in ND.

Applicants must self-certify that they meet the requirements and will comply with current North Dakota Smart Restart protocols. Noncompliance with these protocols will result in the repayment of all grant funds.

If you own multiple businesses at the same physical address, similar to a mall food court, this is considered a campus - defined as businesses under the same ownership structure within 1/4 mile of one another's physical location, therefore only eligible for $25k and $75k max amounts.

Who's Not Eligible
  • Government owned facilities that do not generate more than 51% of its revenue from private events
  • Food establishments without appropriate licensure
  • Retail food, groceries or gas stations who do not derive a minimum of 51% of their sales from prepared food
  • Religious Organizations
  • Lodging facilities (that do not have event space or restaurants)
  • Travel companies
  • Transportation
Applicant Certification
  • Business is physically located in North Dakota​

  • Have a permanent physical location in North Dakota (P.O. Boxes or mailing addresses are not considered a physical location)​

  • Be able to demonstrate they were financially viable prior to the COVID-19 pandemic (including operational and workforce needs)​

  • Must demonstrate they had a negative financial impact by the COVID-19 pandemic​

  • The business must be in good standing with the North Dakota Secretary of State or appropriate Tribal business license authority​

  • Must submit receipts for operations costs incurred on or after March 27, 2020 and use the money on or prior to December 29, 2020​

  • Applicant will self-certify that these criteria will be met as the onus will be on the applicant to ensure that they meet these criteria ​

  • Must have spent the money prior to requesting reimbursement within the 2020 timeframe​

  • Verify that expenditures were not awarded in HERG Round 1​

  • Applicants must self-certify that they meet the requirements and will comply with current North Dakota Smart Restart protocols. Noncompliance with these protocols will result in the repayment of all grants funds​

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Eligible and Ineligible Expenses

HERG FAQ's

The Hospitality ERG (HERG) Round 2 will be used to reimburse these entities for costs in payroll, rent, mortgages that have no affiliation with BND products; marketing expenses, utilities, and insurance.

The North Dakota ERG and HERG funding cannot be used as reimbursement line items for Bank of North Dakota or federally funded loan programs.

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Payroll and Benefits

Cost of retaining employees during eligibility period

Eligible Expenses:

  • Wages and salaries
  • Health Benefits or Insurance Plans
  • Work Comp

Ineligible Expenses:

  • Payroll taxes
  • Bonuses
  • Tips
  • FICA
  • FUTA
  • SUTA
  • Pay off PPP, BND, NDDF, EIDL or any loan documents other than mortgage
Rent, Mortgage, Operating Expenses and Utilities

Overhead expenses

Eligible Expenses:

  • Rent
  • Mortgage with no BND affiliation
  • Utilities
  • Business Insurance
  • Marketing and advertisement
  • Equipment used for daily operation but not for expansion, are allowed
  • Repairs

Ineligible Expenses:

  • Pay off PPP, BND, NDDF, EIDL or any loan documents other than mortgage
  • Depreciation of materials; e.g. building is worth 3% less due to one calendar year of use
  • Food or Alcohol
  • Taxes on purchases
  • Business expansions or new construction
  • Vehicles
  • Items for resale
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REQUIRED DOCUMENTATION:

HERG FAQ's

Applicants are responsible for providing sufficient documentation for all costs, justification for why these items are eligible, and proof of payment.

  • Documents must be clear, legible, and high-resolution, e.g. Word, Excel, PDF, QuickBooks, Accounting Software, etc.
    • Documents not generated by a 3rd party, must include proof of payment, e.g. quarterly tax reports, copy of banking statements, credit card statements, print off from accountant certifying accuracy, etc.
  • Handwritten documents are not allowed
  • Show a detailed description of each expense

 

 

 

  • Clearly identify why and when the costs were incurred.
  • Applicant responsible for indicating which cost category an expense falls into
  • Receipt showing proof of payment
    • Must be Itemized to show all expenses
    • Include a total dollar amount
    • Date of purchase
    • Vendor name and contact information
    • Must tie back to the applicant and the business location (customer name, address, etc.)
    • Payment method noted on receipts
    • Shipping costs must be itemized
    • Taxes must be itemized (ineligible for reimbursement) 
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RECEIPT DOCUMENTATION:

  • Receipts: Legitimate receipts must include itemization (item description and/or picture), total purchase price, date, verification of payment in full, evidence it came from the vendor (letterhead, etc.)
    • Eligible (standalone) Receipts:
      • Itemized vendor receipt that shows proof of payment
      • Invoices if showed paid-in-full with $0 balance due
      • Screen shots showing the required information above (not just the shopping cart screenshot)
      • Receipts for the items from the distributor/supplier which refer back to the invoice or estimate provided
    •  Eligible (if accompanied by proof of payment: cancelled check, credit card statement/receipt, bank draft, etc.)
      • Invoice, quote, estimate, bid, purchase order, etc. (not showing a zero-balance due).
      • Hand-written/editable receipts
    • Ineligible:
      • Receipts showing applicant as the vendor
      • Invoices marked paid without zero balance
    • If ANY of the required information above is missing, or if the receipt is in any way editable, the applicant must provide additional transaction information such as cancelled checks, credit card statements, bank drafts, emails, etc. which provide the missing information.

 

 

  • Note: taxes are not an eligible expense, but shipping is.
  • All expenses provided must be clearly tied to the physical business location
  • If multiple items are on a receipt, clearly highlight or mark which items are being claimed for reimbursement
  • If using supplies from existing stock, 3rd party documentation must be provided to show the initial purchase of those items from the wholesale vendor as well as location
  • Limit one expenditure per line item, with corresponding documentation.
  • If you have listed multiple locations in your application, please note in the description of your line item which location this expense is for.
     

To assist with your payroll expenditures, please click HERE for a payroll cost summary template to fill out and upload in your line expenditure with your payroll expenses. You will need to fill out the form and save to your desktop and then upload this file in your line expenditure along with your other needed documentation.

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For questions on the Hospitality Economic Resiliency Grant (HERG) Program, contact our business help line at businesshelpCOVID19@nd.gov.

 

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