Only half of PPP lenders were accepting applications before funds ran out
The foodservice industry is experiencing a 43-percent to 60-percent drop in sales from where they normally are, according to a new industry update from food consultancy Technomic. Normally, March sales increase 12 percent from February’s sales, but not this year. March is down versus February between 31 percent and 48 percent. Up until March, foodservice sales had been growing at a 4-percent clip.
Non-restaurant foodservice has the biggest drop, particularly since most of those operations are completely shut down. Within this non-restaurant sector, 57 percent of those operators saw sales drop more than 70 percent compared to last year. Furthermore, 63 percent of those operators experienced traffic decreases of more than 70 percent versus the prior year. These non-restauanat foodservice operators include catering, contract foodservice, food-retailer foodservice, travel/leisure and convenience categories.
With an increasing rise of alcoholic beverages available in takeout from restaurants, those orders have dropped dramatically. But likewise, average tickets have risen sharply due to the incidence of bulk orders. However, during the week of March 30, average tickets decreased most likely because consumers had reached a ticket-price threshold they are comfortable paying, reported Technomic.
The Paycheck Protection Program was to dispense up to $349B in partly-forgivable loans, but the money has already dried up. The lack of a cap on the revenues of businesses applying and the limitation of 500 employees per location (and not per business) helped create a surge of applications from businesses.
“The high number of applicants, while attesting to the program’s need, has overwhelmed many lending institutions, that either do not have the capacity to process so many applications or have already hit their lending caps as laid out in the CARES Act,” wrote the Technomic research team.
Up until the funds ran out, only 28 percent of SBA lenders were still accepting applications, noted Technomic. The consultancy’s data also confirmed that a total of 22 percent of lenders were only accepting applications for existing clients. Sadly, half of the lenders were no longer accepting applications at all. To obtain the full report from Technomic, please navigate here.
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