60,000 Restaurant Workers Applied for RERF; $253B Claimed of $355B PPP Loans; IRS Launches Payment Tracker
News continues arriving for restaurant owners desperate for financial relief. Major headlines this week include the exhaustion of funds at the Restaurant Employee Relief Fund (RERF) and Paycheck Protection Program (PPP), an update from the Internal Revenue Service (IRS), and lastly a food delivery pilot from Instagram.
First, the National Restaurant Association Educational Foundation (NRAEF) has officially closed applications to its Restaurant Employee Relief Fund (RERF). It was overwhelmed with 60,000 applications. Each approved grant provided $500 per restaurant worker.
Restaurants have been one of the industries hit hardest by the coronavirus. RERF was established by the National Restaurant Association to assist furloughed restaurant workers. Guy Fieri was one of its celebrity backers, an Emmy Award-winning host of Diners, Drive-Ins and Dives by Food Network. Other major sponsors of RERF included Cargill, PepsiCo, Uber and Coca-Cola Company.
U.S. Government News
The second news item arrived this morning when the U.S. Small Business Administration (SBA) has announced that over $253 billion of the $355 billion that Congress has allocated to its Paycheck Protection Program (PPP) has been claimed as of yesterday. As of Tuesday morning, SBA lenders had processed 1,080,000 PPP applications. For more information on PPP which is a direct cash incentive, please see our prior articles here and here. As of this morning, Coastal Community Bank was still accepting PPP applications for non-customers through Carta at this link.
U.S. Treasury Secretary Steven Mnuchin has indicated that he is requesting another $250 billion for the PPP. The additional grant is encountering delays in Congress. Many restaurant owners are still awaiting their forgivable loan approvals.
Third, the U.S. Internal Revenue Service (IRS) has launched a new tool called Get My Payment for individuals to track the status of their CARES Act $1,200 tax-free payments. Generally speaking, the IRS is depositing $1,200 per person as tax-free stimulus payments automatically into most taxpayers’ bank accounts. No action is needed by taxpayers who filed tax returns in 2018 and 2019.
Instagram Tests Food Delivery
Another news event of interest to restaurateurs: Instagram launched a small pilot for food delivery today. Social media app ChowNow has secured an “Order Now” button and story sticker within Instagram’s app that will allow users to order and pay for food directly from the app.
“It was designed specifically for the time we are in now,” ChowNow Chief Executive Christopher Webb said, referring to both COVID-19 and the resultant time restaurant owners are spending on Instagram. Participating restaurants must be ChowNow clients whose monthly fees range from $99 to $149 per restaurant owner. Instagram is piloting the trial with approximately 14,000 ChowNow restaurant clients in the U.S.
Millions of Restaurant Industry Workers Suffer Repercussions of COVID-19
Approximately 10 million people were directly employed by the restaurant industry as of December 2019, plus another 5 million of associated personnel. According to Rob Gifford, President of the National Restaurant Association’ Educational Foundation, “It is estimated that around 5-7 million workers involved in the restaurant industry in the USA are expected to lose their jobs due to the rising cases of COVID-19 across the nation. Many of them have already lost their jobs and left with no future.”
There is no denying the fact that the advent of COVID-19 in almost all parts of the world has significantly impacted the food services and restaurant industries. Across the country, restaurateurs, chefs, waiters, hosts, and couriers are steadily losing employment. The loss of revenue has caused millions of sudden, forced losses of employment.
“We have millions and millions of restaurant employees without jobs, said Guy Fieri in an interview with ABC News. “We are talking about millions of families along with hourly employees, people living on a paycheck to paycheck basis.
Anne Fink, President at PepsiCo, added “Foodservice and restaurant workers across the United States of America are facing immense financial crises and challenges. As such, they require support for day-to-day needs, including childcare, groceries, housing, and so more.”