KPO grants for HoReCa: last chance for investments

Key information:

• Grants for the HoReCa sector are available under the National Reconstruction Plan (KPO), investment A1.2.1.
• The program is aimed at micro, small, and medium-sized enterprises in the hotel, catering, tourism, and cultural industries.
• The condition for applying for the grant is to demonstrate a decrease in revenue of at least 20%% in 2020 or 2021 compared to the previous year.
• Maksymalna kwota bezzwrotnego dofinansowania wynosi 540 000 PLN, pokrywając do 90% kosztów netto inwestycji.
• The entrepreneur's own contribution is only 10% of the project's value.
• The grant is paid in the form of reimbursement, which means expenses must be financed upfront with your own funds or a bridging loan.
• The project must consist of three components: investment (min. 70%of costs), training (max. 30%), and advisory (max. 30%).
• Support is covered by de minimis aid with a limit of 300,000 euros over three years.

Details below!

The tourism and catering sector must today face the pressure of rising costs and the demands of market transformation, which involves the necessity of significant investment. The answer to these challenges is National Reconstruction Plan. The grants available within its framework for the HoReCa sector are non-repayable financial support, allowing for coverage of up to 90% of the net costs of the entire undertaking. These funds enable the financing of digitalization, the installation of renewable energy sources, or the diversification of services, which under normal circumstances would require the commitment of significant own resources. Due to initial delays in the implementation of the funds, The time for project completion is limited, making timely submission of documentation a key element of successful applications.

What are KPO grants for HoReCa?

Investment A1.2.1 from the National Reconstruction Plan is mechanism targeted at industries most severely affected by the COVID-19 pandemic. EU funds are not for plugging current budget holes, but are intended to stimulate the transformation and diversification of services.

Available grants for the HoReCa sector are primarily based on the concept of business diversification. These funds are intended to help build additional revenue streams that make businesses independent of economic fluctuations and seasonality. The program is based on three assumptions:

• Increase immunity creating business models that generate revenue independently of the current market situation.
• Green transformation: significant reduction in fixed costs thanks to renewable energy sources (RES), closed water circuits, or modern building management systems (BMS).
• Digitalization of processes implementation of advanced reservation systems
  and automation, serving as a response to deepening staff shortages.

For the new strategy to yield the desired results, the decision to expand the offering should not be based solely on intuition. Professional market analysis This is a responsible step before submitting an application, which minimizes the risk of errors and allows for precise matching of the investment to the real needs of consumers.

Who can benefit from the subsidy?

The program conditions are precisely defined and constitute the first formally verified filter for applicant entities. To apply for a grant, a company must prove that it has actually felt the effects of economic turmoil, while simultaneously possessing the potential for modernization. Support is available to entities that meet all three conditions:

• SME Status: The program is exclusively aimed at micro, small, and medium-sized enterprises operating within Poland.
• Revenue decline a decline in revenue of at least 20% in 2020 or 2021, compared to the previous year. Only the net value of sales of goods and services is taken into account for the calculations, excluding other operating income.
• Applicable PKD codes The entrepreneur must conduct business in the hotel, restaurant, tourism, or cultural industry. The PKD code does not have to be the predominant code in the KRS or CEIDG register; it is enough that it is present in the entry, and the project concerns diversification in this area. Detailed requirements
  in this regard, they may differ depending on the recruitment edition.

Meeting the above criteria is a necessary condition for applying for funding. Most applications are rejected during the financial verification stage. Errors in accounting interpretation or the inclusion of incorrect revenues are the most common reasons for project rejection, so historical company data should be thoroughly verified before submitting documentation.

What investments can be financed?

The support mechanism under the KPO was constructed in a modular fashion. An effectively planned project cannot rely solely on simple purchases, but should combine hard investments with the development of personnel expertise and expert planning. Each endeavor must maintain specific proportions of eligible expenditures, encompassing three main components:

• Investment component (min. 70%% costs): forms an essential part of the project. It includes construction works, purchase of fixed assets, investments
  in renewable energy and digital technologies.
• Training component (max. 30% costs): allows financing of training to improve qualifications or retraining of employees employed under an employment contract, in connection with a new business profile.
• Advisory component (max. 30% costs): allows for the engagement of external experts for the development of, for example, a feasibility study, an energy audit, or new technological procedures.

When planning a budget, remember that VAT is an ineligible expense, meaning funds must be secured from the company's own resources to cover it. Each planned purchase should be directly and logically linked to the project's objectives and diversification assumptions.

The right proportions between components translate into the durability of implemented changes. To seamlessly integrate new services with ongoing operations and avoid inefficient budget utilization, it proves useful strategic consulting for service companies, which allows for optimal cost structure planning and maximization of the effects of newly created revenue streams.

How much can you get and under what conditions?

The financial attractiveness of the KPO is the main reason for interest in the program. The conditions are exceptionally favorable compared to other funds in the current EU perspective, but they require budgetary discipline from the beneficiary. The main financial parameters are as follows:

• Support height: the maximum value of non-repayable co-financing is 540,000 PLN.
• Grant intensity: program coverage 90% net costs investments, meaning the entrepreneur only has to contribute 10% down payment. This is a rarely encountered level of co-financing in EU funds.
• Limit of de minimis aid: support is subject to de minimis aid regulations. The entrepreneur must verify whether in the last three years has not exhausted the limit of 300,000 euros.
• Billing system The dominant model is reimbursement. The company first pays invoices from its own funds or bridge credit, and after the operator approves the documents, it receives reimbursement for the incurred costs.

Subsidies for the HoReCa sector are a significant impetus for development, however, the reimbursement model requires careful planning of financial liquidity. Since VAT is
in its entirety at an unqualifiable cost, securing funds for its coverage and for the initial financing of purchases is a necessary condition for the actual implementation of the project, regardless of its substantive assessment.

Build an advantage before the competition overtakes you

National Reconstruction Plan This is an opportunity for the tourism and hospitality sector that is unlikely to be repeated on such a scale in the coming years. Acquiring capital for development is not just a matter of financing current needs, but above all a strategic step towards a modern, ecological, and crisis-resistant business. However, it should be noted that EU procedures leave no room for error,
and project deadlines are non-negotiable. Therefore, the preparation of a complete
and flawless documentation from the very beginning is a prerequisite for effective use
of this support.

Contact us and check how we can support you in preparing the business plan and documentation necessary to successfully apply for funding.