What is the Restaurant Revitalization Fund?
Passed as part of the American Rescue Plan, the RRF provides restaurants, bars, caterers, and other foods service establishments funds to compensate for revenue lost during the pandemic. The program covers a broad spectrum of the food industry and was designed with a streamlined application process. For instance, applicants are not required to register with SAM.gov. “This program is really designed to reach down to the really basic food delivery needs of the islands,” Spain says.
Who is eligible?
A wide array of food service providers that have experienced pandemic-related revenue loss can apply for RRF money. As a rule of thumb, Spain suggests that any entity which regularly sells consumable retail goods to the public may be able to make a justifiable case that they are eligible for the RFF.
Entities that own or operate 20 or less locations as of March 13, 2020, are eligible to apply for funding up to $5 million per location with a $10 million total cap. This includes (but not limited to):
- Food stands, food trucks, and food carts
- Bars, saloons, lounges, and taverns
- Bakeries, breweries, distilleries, wineries, and inns. All of these entities must have onsite sales to the public that comprise at least 33 percent of gross receipts.
- More eligible entities
Some ineligible entities include:
- Nonprofit organizations
- Venues that are permanently closed
- Government-operated businesses
- Publicly traded companies
- An entity that has a pending application or has received a Shuttered Venue Operators Grant
Required Information for Eligible Businesses
All businesses are required to provide the following when applying for the Restaurant Revitalization Fund:
- Business tax returns – either IRS form 1120 or IRS form 1120-S
- IRS Form 1040 Schedule C or IRS Form 1040 Schedule F
- IRS Form 1065, including K-1s, for registered partnerships
- Bank statements
- Financial statements, such as income statements or profits and loss statements
- Point of sales reports – including IRS form 1099-K
Owners of Eligible Businesses
Applicants must list all owners of 20% or more of the business on the application. The listing for each owner must include the owner’s Employer Identification Number (EIN), Social Security Number (SSN) or Individual Taxpayer Identification (ITIN). If an owner of 20% or more of the business does not have a SSN or ITIN, the business is not eligible.
Visit the SBA website for a more comprehensive list of who is eligible for the Restaurant Revitalization Fund.
When is the RRF application open?
The application portal is open as of Friday, April 30, at 3 a.m. Hawaii time for restaurants to register. Companies applying via Square or Toast do not need to register. The SBA and its partners will begin accepting and processing applications on Monday, May 3, at 6 a.m. Hawaii time.
Anyone who is eligible can apply starting on May 3. The first 21 days, however, is a priority period for small businesses owned by women, veterans, and socially and economically disadvantaged individuals. During this period only applications from those priority groups will be funded. All other applications will be added to the queue and processed beginning on day 22.
Download a sample application on the SBA website.
Applicants must self-certify that they meet the eligibility requirements to be considered a priority applicant. The SBA defines socially disadvantaged individuals as those who have been subjected to racial or ethnic prejudice or cultural bias because of their identity as a member of a group. Economically disadvantaged individuals are those whose ability to compete in the market has been impaired due to diminished capital and credit opportunities.
Spain mentioned that the parameters for these priority groups will likely be clarified in the coming months. The best place to find up-to-date information is through the application portal on restaurants.sba.gov. The portal includes a knowledge bank full of scenarios applicants may find themselves in. As of late April, the knowledge bank included more than 90 scenarios.
When is the best time to apply for the RRF?
RRF funds will be distributed on a first-come, first-served basis across the United States. There is no specific allocation for Hawaii. Spain expects the $28.6 billion currently allocated for the RRF to be gone within three weeks. He hopes that Congress will make more funds available because the SBA estimates about four times the currently allocated amount will be necessary to meet the demand.
During their conversation, Barron Guss mentioned (11:00) that the application requires 2020 tax information — including a Form 4506-T — that businesses may not have ready. Spain said that due to the limited funds currently available it would be in the business’ best interest to compile that information as soon as possible and submit a RRF application, even if the tax documents needed to be amended in the future.
What is included as an eligible expense that will not require a recipient to repay RRF money?
Exact details of eligible expenses are still being deliberated. As of late April, eligible expenses were very broad and included most items on a restaurant’s expense sheet. These could include:
- Payroll costs
- Utility payments
- Maintenance expenses
- Supplies, including PPE and cleaning supplies
- Food and beverage expenses
- Operating expenses
- Construction of outdoor seating
- More eligible expenses
Ineligible expenses include expansion costs and capital assets.
When can RRF funds be used?
Recipients have through March 11, 2023, to spend RRF dollars. The funds can be spent on costs incurred between February 15, 2020, and March 11, 2023.
At the end of each calendar year, recipients will be required to submit self-reported and unaudited data detailing how funds were spent. Once a business has spent all its awarded RRF money it must provide a detailed expenditure report.
Where can I get help applying for the Restaurant Revitalization Fund?
On Monday, May 3, the Neal S. Blaisdell Center will be operating as a help center for individuals looking for assistance with the RRF application. The City and County of Honolulu is organizing the event. Volunteers and staff from SBA resource partners including the Veterans Business Outreach Center, the Patsy T. Mink Center for Business & Leadership, and the Hawaii Small Business Development Center will be on site to provide one-on-one guidance with the application. Spain says no technological knowledge is required of attendees and anyone can show up to receive help.
On Tuesday, May 4, at 10 a.m., there will be a statewide webinar covering application requirements and eligibility. Register on SBA Hawaii’s Eventbrite page.
Applying with a POS system.
Businesses that use Clover, NCR Corporation (Aloha), Square, or Toast point of sale systems will be able to get help from their POS provider in order to compile the necessary documentation to apply for RRF money. The system was designed to streamline applications for entities that use these POS systems. Spain said applicants using data from their POS provider will be channeled through a separate application portal.
More POS providers may partner with the SBA in the future. Businesses that don’t use a POS provider which has partnered with the SBA should apply through restaurants.sba.gov.
What will the turnaround time be?
The development process for the RRF application benefited from lessons learned from PPP loans and Economic Injury Disaster Loans. Spain has past experience with the software used for the RRF and he personally expects the turnaround time for funding to be truncated.
Guss, Jones, and Spain also discussed the future of the SBA and major changes in the restaurant industry. Be sure to watch the entire interview (above) to get all the details.
Like us on Facebook and LinkedIn to get the latest on issues affecting the local business community.
Have a question for our HR experts? Contact simplicityHR to learn more about the advantages of having our team of professionals on your side as you navigate the American Rescue Plan Act and the Restaurant Revitalization Fund application.
[vcex_divider color=”#dddddd” width=”100%” height=”1px” margin_top=”30″ margin_bottom=”30″]
Thornton “Mark” Spain serves as the District Director for the U.S. Small Business Administration’s (SBA) Hawaii-Pacific Islands District Office. Mr. Spain’s extensive experience includes over 50 years of banking, financial services and consulting work specifically engaged in the formation of new businesses and service in the United States Marine Corps. Mr. Spain joined the SBA in 2012 and served as the Deputy District Director before being appointed as the District Director in 2021.
Tom Jones is a graduate of the Culinary Institute of America. His food service career spans over 50 years from fast food cook at the age of 14 to Hotel and Country Club Executive Chef. He moved to Hawai’i in 1986 after training in Japanese cuisine for two years in Tokyo and managed the Kyotaru & Columbia Inn restaurants for 15 years prior to founding Gyotaku Japanese Restaurants & more recently KOROMO katsu & curry bistro. He has also been an active Board Member of the Hawaii Restaurant Association for the past 25 years and served as Chairman.
About Barron Guss
Barron is President and CEO of simplicityHR by ALTRES, Hawaii’s leader in human resources outsourcing. Barron and ALTRES are credited with not only establishing the HR outsourcing industry in Hawaii, but also pioneering it nationally. His business has grown into a family of companies that include ALTRES, simplicityHR, HR Symphony, Real Jobs Hawaii, Home Care by ALTRES and four specialized staffing divisions (ALTRES Office, ALTRES Technical, ALTRES Industrial and ALTRES Medical) serving the state of Hawaii with office locations across Oahu, Maui, and Hawaii Island.
A recognized leader of the national Professional Employer Organization (PEO) industry and long-time board member and 2019 chairman of the National Association of Professional Employer Organizations (NAPEO), his company began providing Human Resource services to local employers in 1969 when the industry was still in its infancy. Barron continues to lead the charge in the Business Administration arena and his dedication to innovation earned him the 2021 Corporate Intrapreneur of the Year by Hawaii Venture Capital Association.