project-2020-07-20_15-07_PM.pngNo other industry or sector of the economy has suffered as much as the foodservice industry, and no other industry will take as long to recover. COVID-19 closures and the economic downturn have crippled restaurants and the farmers and distributors that supply them their food and supplies. A recent study finds that 85% of independent restaurants may go out of business by the end of 2020.  Recovery has gone from a temporary challenge to a seemingly permanent industry disruption. 

How Can Congress Help?


Expand the PPP Program to Allow Restaurants to Get the Food and Supplies They Need to Open.
Restaurants buy their supplies on payment terms that allow them to generate revenue before the bill comes due, normally 24 days after delivery.  With the sudden and near complete closure of the food-away-from-home channel back in March, those customers had no sales and have not been able to pay their distributors.  Now as these companies look to reopen, they again need to rely on distributor credit to purchase the products they need.  Expanding the PPP program to allow forgiveness for payments to suppliers will help distributors and their customers as they work to survive in this difficult time.  Click here to find out more and send a letter to your Member of Congress in support this plan.

Provide Tax Credits to Cover the Uncollectable Debt.
Foodservice distributors serve as the bank for America's restaurants and are critical to getting our economy up and running again. With industry estimates that as many as 15 percent of restaurants will close permanently, distributor uncollectable accounts receivable balances are creating a significant threat to the financial viability of the overall foodservice industry. Foodservice distributors extend trade credit to their customers to allow them to purchase food products and supplies. The shutdown has meant that restaurants are unable to create the cash flow necessary to pay for the goods they received from their distributor.  

In order to restart their businesses, restaurants will need to purchase new ingredients and other supplies.  With no, or significantly reduced, revenue incoming since mid-March, they are not likely to have the cash available to pay for these products and will look to their distributors to provide credit. Foodservice distributors may not have the liquidity they need to make this credit available.

Providing tax credits to cover the uncollectable debt restaurants owe to distributors will allows them to extend trade credit to our customers to help them get back on their feet. Fortunantly, Representatives LaHood (IL), Panetta (CA), and Davis (IL) introduced the Providing Liquidity for Uncollectable Sales (PLUS) Act on July 21. This legislation provides a tax credit to offset uncollectable debt incurred as a direct result of COVID shutdowns. Click here to find out more and send a letter to your Member of Congress in support of the bill.