SBA to Increase EIDL Loan Amounts to $2 Million
After Labor Day. The Small Business Administration is expected to lift the cap on its Covid Economic Injury Disaster Loans (EIDL) sometime after Labor Day on September 6, bringing the low-interest long term loan available to any small businesses struggling amid the pandemic back up to $2 million. The cap was set at $500,000 in March 2021, after the SBA spent several months approving only loans of up to $150,000. Traditionally, the EIDL loan program–which has a 30-year maturity date–has a $2 million cap and loan interest terms that range from 2.75 percent for nonprofits to 3.75 percent for businesses. Despite the promising news, not every business will have access to the expanded funds. The amount for which you qualify now is based on your 2019 total revenue minus your cost of goods sold, less any EIDL already received. Plus, it’s not yet clear what the requirements will be regarding whether you have to prove economic injury. You may have to show your 2020 numbers and demonstrate financial loss to get any kind of supplemental EIDL.
Restaurants Struggle After Missing Out on Bailout Funds
It feels like they just flipped a coin. Restaurants may be in for another stomach-churning dip on their pandemic roller-coaster ride, but some have not been buckled in as snugly as their competitors. About 101,000 restaurants — including chains and franchises — were recently handed a lifeline from the federal government in the form of grants from a $28.6 billion pot of relief funds known as the Restaurant Revitalization Fund, or RRF. But 177,000 restaurant, bar and catering-business owners, many of whom applied for and were denied grants, are holding out hope that help is on the way for them as well. As the COVID-19 delta variant spreads, hospitals fill up again and companies decide to keep their employees working from home, restaurateurs who just barely exhaled as business picked back up in the past few months are worried all over again. The restaurant grants distributed so far “created two categories of people — the haves and have nots,” said Ken Aretsky, who with his wife Diana owns Aretsky’s Patroon in New York City. “We have competition literally a few feet away who got $5 million. How are we going to compete with them, especially now that there’s this variant? It’s very unnerving.”.
U.S. Job Growth Seen Slowing in August
As Delta variant curbs services demand. U.S. employment growth likely pulled back in August after gaining nearly 2 million jobs in the past two months as soaring COVID-19 cases reduced demand for travel and entertainment, but the pace was probably enough to sustain the economic expansion. The Labor Department’s closely watched employment report on Friday would come as economists have been sharply marking down their gross domestic product estimates for the third quarter. Reasons cited include the resurgence in infections, driven by the Delta variant of the coronavirus, and relentless shortages of raw materials, which are depressing automobile sales and restocking. Surging COVID-19 cases could also have kept some unemployed people home, frustrating efforts by employers to boost hiring.
COVID’s Remarkable Impact on Restaurants
18 months later. The current state of the restaurant industry isn’t easy to characterize. Remember in March 2020 when officials thought the country would shake off COVID-19 by Easter? We’re now 18-plus months removed from the onset of shutdowns, and yet restrictions continue to crop back up and case numbers are as volatile as ever thanks to the Delta variant. Debates rage over masks, vaccines, federal aid, and whether or not businesses should be at the mercy of consumer demand or government mandates. In a lot of ways, the start line feels more familiar than the vision of a post-pandemic world. Yet still, 2021 is more of a transition year for restaurants than the disruptive force 2020 was. The pivots made during the depths of the crisis will help operators respond to whatever comes next. It’s a matter of navigating present and lingering challenges, like labor, commodities, and consumer expectations, while also considering life on the other side. And many restaurants are still working back to even after taking on significant debt in the last year-and-half. The National Restaurant Association released its 2021 Mid-Year State of the Restaurant Industry Update on Tuesday. It illustrated the impact of COVID and took a look at key indicators and trends influencing the sector’s recovery.
How Restaurants Can Prepare for a Post-Pandemic World
New technologies are helping food-service businesses to survive and thrive. Running a food-service business isn’t for the faint-hearted: even before the COVID-19 crisis, one in three new restaurants didn’t survive their first year. Layer on a global pandemic, of course, and the going gets even tougher. During 2020, U.S. restaurants saw revenues plunge by $240 billion, and over 110,000 restaurants were forced to close their doors, leaving 8 million employees out of work. To survive, restaurateurs have been forced to find new ways to serve customers. About half of all restaurants — across every category, from fine dining to fast casual — have made new investments in technology during the pandemic, helping them to provide online ordering, curbside pickup, and other services designed to help keep the doors open during these turbulent times. Now, restaurants are starting to transition out of crisis mode — and leveraging and building on those pandemic tech investments could be key to their continuing success.
Restaurant Hiring in Today’s Reality
How do I hire restaurant employees in today’s labor market? The restaurant industry is back to busy, with full indoor capacity and a dining public eager to eat out. However, as all restaurant operators know, this uptick in business has come with staffing challenges. The restaurant industry has historically grappled with a higher turnover rate than other industries, but the current restaurant staff shortage is nearly unprecedented. Some operators are even decreasing hours or closing locations due to a lack of restaurant staff. For many, the current labor shortage centers around both restaurant hiring and employee retention difficulties. The shortage is especially acute for back-of-house employees, such as prep cooks, line cooks, and dishwashers. How can you address the restaurant staff shortage? Drawing from industry insights and restaurant operators, here are four practical tips.
How Restaurants Are Connecting with the Hybrid Workplace
It’s taking some retooling. Most corporate offices had a “return-to-work” plan set to go into effect this month, but the delta variant of COVID-19 is delaying that return for many. Even when offices do reopen, it looks like hybrid models will grow in popularity, allowing employees to work remotely several days a week. That doesn’t bode well for eateries that feed the office lunch crowd. But Alex Groesbeck, president of restaurant aggregator Fooda, is optimistic. “Delta may be postponing that return, so the timing is different, but we believe there will be a dynamic work environment in which employers will incentivize workers to come into the office,” he said. Fooda believes more companies will want to have more robust food options without operating a full-blown corporate cafeteria. To accommodate the changing office environment, Groesbeck and his team retooled Fooda during the pandemic, focusing on upgrading technology to allow companies to subsidize food at work through discounted meals at restaurants.
I’ve Borrowed $2 Million to Keep My Restaurants Afloat
It’s not enough. It feels just like March of 2020 for restaurants. Philadelphia enacted a mask-or-vaccination mandate on Aug. 12 to instill confidence in customers and protect our community. Guests are once again afraid to eat indoors. Reservations in restaurants in Philadelphia are down over 45% below their 2019 levels. Fewer people are dining out; revenues have started to decline once more. Our businesses desperately need help. The situation for our industry is far more dire now than it was at the beginning of the pandemic. We cannot endure another revenue downturn. I have borrowed nearly $2 million to get us through the pandemic, to keep our staff employed and our doors open. Some of this debt is being forgiven, but most is not. I cannot saddle this business with any additional debt, and the threat of a slow winter is terrifying. I have done everything I can to keep my business afloat during the past year and a half. We have pivoted our business model repeatedly. We emphasized takeout even though that’s not what we do. Despite all our scratching and clawing, restaurants and bars have lost over $280 billion since the start of the pandemic.
NYC Restaurants Left Reeling
After Hurricane Ida slams east coast. Following torrential rainfall last night in the wake of Hurricane Ida, restaurants across the city are delaying openings today due to basement flooding and public transit shutdowns. Heading into the Labor Day weekend, restaurants are struggling to reopen in the aftermath of the storm, which caused flooding in buildings across the city and forced much of the subway system to suspend service overnight. Vegan restaurant Grilled in Bushwick temporarily shut down until 12 p.m. tomorrow, while all-day cafe Porcelain in Ridgewood canceled its daytime service on Thursday with plans to reopen for dinner at 5:30 p.m. NYC’s Central Park recorded 3.1 inches of rainfall in one hour Wednesday night, exceeding the previous record of rainfall in one hour — 1.94 inches — that had been set one week earlier as tropical storm Henri blew through the area. The downpour caused the park’s lake to swell up and water spewed over the dining room floor of the iconic restaurant at the Loeb Boathouse, which overlooks the lake. “It’s not like we had water coming in from the roof — the whole lake rose up,” proprietor Dean Poll says. “The height of the lake went higher than the boathouse.”
Did You Know?
The top 10 American Restaurants that are no longer with us. A change of pace this week. Instead of an economically focused piece, the subject this time will be restaurants. In particular, restaurants that have closed but that are very much missed. Up front, the list is going to be a mix. Some restaurants high end, some in between, and some of the fast food or dive variety. The only commonality to them is that they were all a joy to dine in before closing.
Expanded Federal jobless benefits ended on Saturday. Pandemic-related federal programs that extended unemployment benefits to those who are typically ineligible and provided a $300 a week supplement on top of regular unemployment payments all end on Saturday. Among the federal programs expiring Sept. 4 are: (i) Pandemic Unemployment Assistance (PUA), which provided unemployment benefits to self-employed workers, independent contractors and others who are not typically eligible for benefits; (ii) Pandemic Emergency Unemployment Compensation (PEUC), which extended unemployment payments to those who have already exhausted regular unemployment benefits; (iii) Federal Pandemic Unemployment Compensation (FPUC), which added a $300 weekly supplemental payment to regular unemployment.
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Owner Drop Price and Says “SELL.”
Buddies Tavern and Banquet Hall has been a staple in the Sayreville/Parlin community for 2 generations. The building experienced fire damage and needs renovation. This sale consists of an approx. 4,100 SF building, a liquor license and a 3 bedroom/1 bath house. This is a perfect value-added investment for the right buyer.
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