fortune--2020-04-29--14 years in 14 days: Inside the chaotic rollout of the SBA’s PPP loan plan to save America’s small b

14 years in 14 days: Inside the chaotic rollout of the SBA’s PPP loan plan to save America’s small businesses

Nick Gitsis has been working hard to see his small family restaurant through the coronavirus crisis. Located in what he describes as a “sleepy town” in Warsaw, N.Y., Gitsis’s business, Silverlake Family Restaurant, has been getting creative to keep the money coming in and to retain its 25 employees. “We have a drive-thru window for takeout, but we’re even selling some bread and cheese and milk and cucumbers to make it easy for the people who don’t want to get exposed in the grocery stores,” he tells Fortune.
Gitsis applied for an estimated $125,000 loan from the Small Business Administration’s Paycheck Protection Program (PPP) through his local bank of 30 years, Five Star Bank. But on April 18, he was informed there was no money left for his loan after funds ran out the Thursday before—shortly after finding out that big restaurant chains, like Ruth’s Chris Steak House, received millions in loans.
“They get their millions the next day, and this is a company that’s making [millions] a year,” he says. “It was disappointing, because that’s not a small business. I thought the aim of the PPP is to help small businesses keep people working.”
Funds for the first round of the SBA’s Paycheck Protection Program ran out on April 16, and now many small-business owners are frustrated that over 200 publicly traded companies received over $750 million in loans, according to a New York Times report—and several large restaurant chains, including Shake Shack, Potbelly, and Ruth’s Chris Steak House qualified for $10 million loans (the maximum loan available). In addition, companies affiliated with Monty Bennett applied for $126 million, including Ashford Hospitality Trust, which together reportedly received roughly $70 million. Some small businesses are even suing banks like JPMorgan Chase, Bank of America, Wells Fargo, and US Bank for allegedly prioritizing these bigger customers.
The rollout of the SBA’s Paycheck Protection Program was chaotic, and problems were exacerbated by an intense time crunch that tasked lenders and the government with distributing $349 billion to small businesses in a matter of weeks. Banks were waiting on guidance from the government on how to roll out the loans till the night before the program was set to debut. On the day of the launch, many small businesses were upset over some big banks prioritizing current lending or business customers first, and in just 13 days, the initial $349 billion ran out.
It was “more than 14 years’ worth of loans in less than 14 days,” U.S. Treasury Secretary Steven Mnuchin and SBA Administrator Jovita Carranza announced in a joint statement when funds first ran dry.
In all of 2019, the SBA guaranteed less than $30 billion in loans, leaving some observers impressed the program got off the ground—and worked—at all. Maria Earley, a financial services regulatory and enforcement partner at international law firm Reed Smith, “applaud[s] the regulators for getting the thing up as quickly as possible,” she recently told Fortune. Even many smaller banks told Fortune they thought the program was doing a lot of good in their communities. Indeed, money has already been approved for over 1.6 million businesses. Brett Palmer, the president of the Small Business Investor Alliance (SBIA), based in Washington, D.C., was active early on consulting with Congress for the CARES Act, and he tells Fortune, “It’s very easy to Monday-morning quarterback the writing of the CARES Act” and criticize its shortcomings. “But when this was written, it was with almost zero time, getting blindsided, and really at the front end of a maelstrom. You didn’t know what was coming, and you just knew it was going to be god-awful. The triage situation they put together was the best they could,” he says. “Nothing works perfectly, but the underlying structure really hit the nail on the head with what small businesses need.”
Through interviews with small businesses, small banks, lawyers, and industry experts, Fortune pieced together a picture of a well-intentioned program with a multitude of unintended consequences that has left many small businesses—those same ones initially targeted to receive much-needed help—still struggling to get lifeline funds.
The beginning
When by early March the coronavirus was starting to spread across the U.S., many state governors made the tough choice to issue stay-at-home orders in hotspot cities (like New York). And for most small businesses, that meant an immediate hit to—or even cessation of—their income.
In response, Democrats and Republicans in Congress debated over a bill first proposed by Sen. Marco Rubio, as part of the larger $2.2 trillion CARES Act, to provide loans (which could become forgivable grants) for small businesses. This was later named the Paycheck Protection Program. The program partnered the Treasury and Small Business Administration with banks and other SBA lenders to fund loans, which were intended for small businesses (which the PPP defines as those with 500 or fewer employees). The money was intended to flow to those “who could not get money like that from anywhere else,” Rubio, the chairman of the Senate Committee on Small Business and Entrepreneurship, recently noted in a video on Twitter.
Of course, no legislation gets written without the help of lobbyists. The National Restaurant Association, headquartered in D.C., had an ask: that chains be allowed to participate. Hospitality and restaurants were deemed some of the hardest hit by the coronavirus pandemic, leaving many devastated amid the crisis.
Carve-outs written into the nearly 900-page CARES Act by Congress allowed larger companies and franchises in industries like hospitality and restaurants to receive funds, so long as they did not have more than 500 employees per location. “Clearly, people have seats at the table when legislation is being written,” notes Christopher Rossi, a partner who focuses on small business investment companies (SBICs) at law firm Pepper Hamilton.
Indeed, in a post on LinkedIn following general outcry, Shake Shack executives wrote they would return their $10 million PPP loan, stating, “Our people would benefit from a $10 million PPP loan, but we’re fortunate to now have access to capital that others do not…Until every restaurant that needs it has had the same opportunity to receive assistance, we’re returning ours.” The company is publicly traded, with 189 locations and nearly 8,000 employees, and close to $595 million in revenue last year.
Large restaurant chain Shake Shack qualified for a $10 million loan. Ben Gabbe—Getty Images
Others, like Ruth’s Chris Steak House, whose owner was able to receive $20 million in PPP loans through two subsidiaries, announced it was also returning the money following pressure from new SBA guidelines.
“Optically, I think it looks terrible,” says Ken Logsdon, a partner at international law firm Dorsey & Whitney. But the bigger chain companies that, in many cases, had thousands of employees, were technically eligible for the program.
And restaurant chains weren’t the only larger businesses receiving loans. Companies like biotech Wave Life Sciences and cruise ship company Lindblad Expeditions, both of which have market caps of over $200 million, also received loans. AutoNation, a retailer with a market cap of over $3 billion, also received and later returned a $77 million loan. And according to a New York Times report, several large but less known companies received funds despite having financial or legal problems.
Following backlash over the kinds of companies getting the loans, those like Rubio declared aiding “multiple subsidiaries of a national brand [like Ruth’s Chris]” was not the intent of Congress, and that “the regulatory guidance allowing this does not reflect legislative intent & should be corrected,” he said in a tweet on April 20.
Congress waived certain rules, but not others
There was always the issue of time.
Those like the SBIA’s Brett Palmer had input from the beginning. He advised members of Congress about the needs of small businesses for the CARES Act, and notes that one thing was always clear: The more restrictions put into the bill, the more harm would be done to businesses in the interim waiting for funds. “I explained that to the folks who were writing the bill this time [and] said, you’re going to have to get comfortable that there are going to be problems…if you want to get the money out fast,” he recounts. “There was no way to build something that was going to work for everybody, but they were trying to.”
The plan was put together hastily: Based on the rapid impact of nationwide shelter-in-place orders, the funds needed to get to small businesses quickly. The Treasury’s Mnuchin set what many banks found to be an unrealistic timeline: “This will be up and running tomorrow,” Mnuchin said on the eve of the April 3 launch. “You get the money. You’ll get it the same day.”
In the interest of time, the PPP was largely created out of the traditional SBA 7(a) loan program, with a few changes—including the 500-employee guideline and, perhaps most notably, carve-outs for certain industries like accommodations and food services that fall under the North American Industry Classification System code 72. Those modifications departed from SBA rules to allow those businesses to qualify.
In the meantime, some small banks were funding much smaller loans. David Reiling, the CEO of the Minnesota-based regional Sunrise Banks, tells Fortune that his bank was processing loans for as little as $1,300. “My empathy goes out to those workers that work at Shake Shack or Ruth’s Chris that are the waiters and dishwashers,” he says, but “a $10 million loan at our rate on a rough basis is 40 loans—that’s 40 more businesses” that could have been funded. But “to the extent that someone is able to take on such a large borrowing, of course that crowds out [smaller businesses],” John Asbury, CEO of the regional Atlantic Union Bank, based in Virginia, tells Fortune. The bank was able to get over 6,500 loans approved before funding from the first round was cut short and had thousands of applications backlogged for the second round.
But there was another debate ongoing about the kinds of exceptions made for certain businesses that deviated from traditional SBA guidelines.
One area largely excluded from these waivers was private equity. Private equity trade groups including the American Investment Council (AIC) and the Association for Corporate Growth (ACG) lobbied heavily early on to include private equity–backed companies in the $349 billion PPP round, arguing against certain affiliate rules that apply to regular SBA loans. Private equity is what Pepper Hamilton’s Rossi characterizes as a “disfavored political group.” At issue: so-called affiliate rules. These are based on a complex set of tests including ownership (majority stake), stock options, management, and control of a company—but generally, if a PE firm owns a majority stake or controls a number of portfolio companies, those companies are considered to be affiliated, which in many cases could drive the employee count for any one business far above the 500-person threshold and exclude lots of businesses that might otherwise qualify for the loan. But several lobbying groups largely failed to amend affiliate rules for round two of the PPP. The ACG, a middle-market group for investors and professionals, announced on April 4 that it received notice “from many of its members of massive layoffs anticipated” owing to affiliation rules for the PPP.
Meanwhile, SBIA’s Palmer tells Fortune, “Candidly, we would have liked to see the affiliation rules be broader,” to cover more realms of private equity and venture capital–backed companies—including those who would otherwise qualify for SBIC investment (one hallmark requirement for companies to qualify for SBIC investment is to have employment primarily in the U.S., he says, something that would go a long way in safeguarding jobs via the PPP). That also includes some family-owned businesses that may have multiple companies (like a roofing company and a restaurant, he notes) getting “tripped up” by the affiliate rules.
The upshot: “The fact that we’re seeing the Ruth’s Chrises and Shake Shacks taking advantage of this program because they have the luxury of not having to worry about the affiliate rules,” Logsdon notes, is “a good glimpse of what happens when you pull [the rules] back.”
Fintechs were largely left out
Funding Circle’s Ryan Metcalf has been frustrated.
Metcalf, the head of U.S. regulatory affairs for the U.K.-based fintech lender, notes that lenders such as his specialize in the mom-and-pop-type companies with smaller loan needs largely overlooked by bigger banks. Though many fintechs applied to become SBA-approved lenders, approvals came late in the game. In fact, Fortune reported that many fintechs like Funding Circle, OnDeck Capital, BlueVine, PayPal, Intuit’s QuickBooks, and Square received approval from the SBA just as round one funds ran out.
Given their smaller client base, some argue the smallest of businesses might have had a better shot at getting funding had fintechs been approved to lend sooner. An analysis of SBA data by Plaid, a fintech company providing software to some nonbank lenders, found that nearly half of the PPP funding in round one has gone to just 4% of small-business applicants. For one, Funding Circle preprocessed thousands of loans before the second round opened up, and Metcalf says some 61% of those PPP applications were for $50,000 and under (the average loan size BlueVine has processed is also $50,000). Meanwhile, Jackie Reses, head of Square Capital, tells Fortune the fintech’s average loan size thus far has been just $25,000.
“The reality is this program has not met the needs of the grand majority of true small businesses, Main Street small business,” Eyal Lifshitz, CEO of BlueVine, recently told Fortune of the first round of the PPP.
Welcome to round two
The million-dollar question: Who will give the money back?
So far, several of the larger companies at the forefront of the controversy (including Shake Shack, Ruth’s Chris Steak House, Wave Life Sciences, and Kura Sushi USA, a subsidiary of a Japanese restaurant chain, with loans ranging from $6 million to $20 million) have already announced they would return the loans, as did others, such as NBA team the Los Angeles Lakers. As of Tuesday, 18 public companies have returned loans so far, according to Washington, D.C.–based data analytics firm FactSquared, which built a tracker. But many of the 41 largest public companies to receive the PPP loans have either confirmed their intent to not return the loans or that the decision was pending, according to a recent CNBC report.
Now, as Congress deploys another $310 billion for the program—pushing the total since its inception to an eye-popping $659 billion—many of the issues are back at the fore. But inked into the bill (and bolstered by additional guidance) are some notable provisions aimed at remedying those issues from the get-go.
President Donald Trump at a signing ceremony for H.R. 266, the Paycheck Protection Program and Health Care Enhancement Act, on April 24, 2020. Anna Moneymaker—The New York Times/Bloomberg/Getty Images
New guidelines from the Treasury and SBA, noting it is “unlikely” that public companies “with substantial market value and access to capital markets will be able to make the required certification in good faith” and thereby qualify for the loan, have many public companies already returning loans (or feeling pressured to). On Monday, the SBA said some $2 billion of loans were either denied or returned, just as the SBA’s system opened back up, and will be added to the current $310 billion pool.
Additionally, Mnuchin told CNBC on Tuesday the government will audit any company taking out more than $2 million from the PPP. Rubio also recently announced the Senate Committee on Small Business and Entrepreneurship “will conduct aggressive oversight” into the use of the PPP amid concern it was lacking in the first round.
For those smaller companies, the new PPP funding round includes some $60 billion for Economic Injury Disaster loans, $10 billion of which are grants. And of the $310 billion for PPP loans, $60 billion is set aside for small institutions, including half of that sum for lenders with $10 billion or less in assets—an attempt to help service those smallest businesses who missed out on round one. However, those like Funding Circle’s Metcalf still don’t think it’s the right medicine for what’s ailing the program. He argues if the SBA wanted to cater to the smallest businesses, it would allot separate money for loans $50,000 and under, or for companies with 20 or fewer employees, for example, rather than refueling smaller lenders whose average loan size can be in the hundreds of thousands.
“They got it wrong on this round, and hopefully there will be an additional round after this [$310] billion, because it will go in a matter of days,” Metcalf suggests.
Round three is also already on the brain for Atlantic Union Bank’s Asbury: “The real question in my mind is, if after the second round of funding there is still great demand from the program from the traditional businesses that qualified, the smaller ones, will Congress support a round three of funding? I hope they will.”
But for those like Nick Gitsis, not getting the PPP loan for his local restaurant soon means permanent layoffs. He tells Fortune he has already had to lay off some staff and is keeping many on through what he dubs an “on-call basis.”
Gitsis was informed Monday that he’s in the queue for new funds but hasn’t heard anything more.
This article has been updated to reflect the loans companies associated with Ashford Inc. received.
More must-read finance coverage from Fortune:
—Why Goldman Sachs thinks Q1 GDP will be “worse than it looks”
—5 lessons for the coronavirus recovery, from an expert on success and failure in crisis
—What the law says about forcing employees back to the office
—This time, the banks were ready: How the Big Four prepared to survive the coronavirus
—Where investors can find income in a coronavirus-crushed market
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEOs
—WATCH: Why the banks were ready for the financial impact of the coronavirus
Subscribe to Fortune’s Bull Sheet for no-nonsense finance news and analysis daily.


fortune--2020-04-29--Restaurants are converting their spaces into retail stores to ride out the coronavirus pandemic

Mayor London Breed gets along with her governor .
But her ‘ heart goes out to ’ city leaders who @ @ @

Subscribe to Outbreak, a daily roundup of stories on the coronavirus pandemic and its impact on global business, delivered free to your inbox.
With takeout and delivery as the only means of business for most restaurants and bars still open across the United States, owners of these independent establishments have found themselves forced to get desperately creative to ride out the coronavirus pandemic.
From coast to coast, many restaurants have added grocery sections to their online menus, selling à la carte pantry items such as rice, beans, olive oil, salt, bread, dips, salad dressings, and even butcher cuts of meat and fish. Prices might be higher on average at these restaurants turned larder purveyors than those at your local grocery store or even the corner convenience shop. But many of these eateries are trading on the hopes that customers will respond to both the particular culinary expertise these locations offer as well as the loyalty of its customer base.
Chef Curtis Stone’s Gwen Butcher Shop & Restaurant in Hollywood, for example, shifted to a marketplace model with a focus on select meat cuts, and his 24-seat fine dining space, Maude, in Beverly Hills, has a brand-new menu catering to families, with rotating items including a fully brined and organic spatchcocked chicken with whole grain mustard spaetzle, a lasagna Bolognese, and a spring vegan platter.
“It’s important to keep pushing ourselves just as we did under normal circumstances,” Stone tells Fortune. “We’ll keep going as long as we have the patronage of our guests. It’s been wonderful to be in a position to serve the community and see our loyal regulars from the dining room and new friends, who are stopping by and picking up items to show their support.”
In the past, selling off existing inventory as wholesale products was typically a way for restaurants to avoid food waste. Very few establishments have taken this a step further by continuing to retail these items in addition to providing takeout services, according to Rachel Hyland, a senior analyst at market research firm IBISWorld. But while only a minority of restaurants are going this route, the concept has increased in popularity throughout the pandemic.
“Most operators that were retailing their goods have already closed, shutting their door once their inventory was depleted,” says Hyland. “Operators that are sustaining this retail model are likely to continue so long as there is enough demand to warrant the costs of remaining open.”
However, most restaurant operators won’t be able to do enough volume in a small footprint to make food staples a sustainable business, warns David Portalatin, a food industry advisor at The NPD Group. “It’s the reason why convenience stores today are all emphasizing higher margin prepared foods,” he explains. “We are seeing blurring of channel lines in food service and retail as restaurants seek out retailers as outlets for prepared food as well as selling staples, like take-and-bake items or other components to help consumers prepare a meal. We may see more hybrid models emerge post-pandemic, but these are really stop-gap measures for restaurants now.”
All Time, a neighborhood restaurant in L.A., has become a full marketplace, in addition to serving hot food from its menu. Provisions for sale include eggs, milk, dry pasta, and wine from the small vendors it works with and continues to support. Courtesy of All Time
All Time, a popular neighborhood restaurant in the Los Feliz district of Los Angeles, is selling “grocery survival kits,” curated by dietary preference, for vegetarians, pescatarians, and meat eaters. For $250, the vegetarian box includes eggs, dry pasta, dry rice, potatoes, kale, bread, olive oil, Parmesan cheese, coffee, hot sauce, a taco kit, the choice of dairy or oat milk, and two rolls of toilet paper.
“We have such immense access to the best stuff around, from meat to produce and everything in between, so we knew we had to make these items available directly to our community, and also continue to support our longtime vendors as much as possible,” says co-owner Ashley Wells.
She and her husband (and co-owner), Tyler, have completely reengineered the operation—both in what they offer and in the way they conduct business. Payment transactions are no longer conducted in person; everything is now exclusively ordered online. And no guests are allowed to come inside the restaurant; everyone—employees and patrons—must wear masks.
“The business model is almost unrecognizable now,” Tyler says. “Our biggest challenges were keeping up and maintaining our high standards of both service and product quality in the midst of being a very busy neighborhood restaurant. It’s funny, because we got plunged into the world of takeaway just as we were really diving into some R&D for this very model, and thinking about how we could best serve the neighborhood with takeaway offerings as All Time is really a dine-in restaurant.”
“The feedback is two-way and constant; we are continuously seeking to improve our offerings and stay current, flexible, and offer more than the minimum. This is always our North Star—that we overdeliver on both quality and experience, whether we are in our familiar dine-in hospitality mode or the strange new climate in which we now operate,” says Ashley Wells, co-owner of All Time in Los Angeles. Courtesy of All Time
While many restaurateurs have been forced to sell off all existing inventory just to stay afloat, Christopher Bates— founder of five restaurants in New York’s Finger Lakes region within his F.L.X. Hospitality group—drummed up a new line of revenue during this uncertain period. With the recent change in New York State liquor laws allowing restaurants to sell wine out of their dining rooms, Bates converted one of his restaurants into a full retail shop (called the Super Secret Wine Shop ) with a bottle list he hand selects (Bates is a master sommelier) for curbside pickup, local delivery, and shipping nationwide.
“I figured, even if it doesn’t work, we might as well be ready for when we are allowed to reopen, Bates says. Since then, the wine shop has grown with new offerings (like Blind Tasting Boxes ), which have proved popular with customers, enabling Bates to bring back more employees. Sales have been so high that Bates needed to purchase new inventory and expand his selection to meet demand.
“Honestly, at first, my reaction [to the shutdown] was rooted in anger and frustration, and then survival mode kicked in. And that helped,” Bates says. “It’s what we restaurateurs are good at: survival, adaptation, innovation. And as we went through those states, excitement began to build.”
Prior to the coronavirus shutdowns, there were approximately a million restaurants open nationwide—an estimated half of which are independently owned—with roughly 15.6 million employees, according to the National Restaurant Association. And nine in 10 restaurants had fewer than 50 employees. Overall, restaurants generate $880 billion per year in revenue and account for 4% of the nation’s GDP, according to the Independent Restaurant Coalition (IRC), a grass-roots movement among chefs and restaurant managers that formed in March.
But after shelter-in-place mandates were implemented along with the closure of nonessential businesses across the country, starting in California the week of March 9, the restaurant industry has been nothing short of decimated. The food service industry is expected to lose more than $50 billion in sales in April alone, and more than 8 million restaurant employees have been laid off or furloughed during the pandemic as of April 16. The IRC estimates that figure will grow to 11 million as the current economic crisis drags on.
The Super Secret Wine Shop, which had been set to open as F.L.X. Provisions. Courtesy of FLX Hospitality
Robyn Matarazzo, co-owner of Villaggio Italiano in Westchester County, N.Y., also implemented a variety of initiatives to adapt to these changes. The 42-year-old, family-run eatery is now offering DIY pizza kits, so families can make their own pizzas at home, as well as meal packages complete with all the ingredients for a restaurant-style experience.
Matarazzo explains the restaurant came up with the DIY pizza kits in response to parents being home with their kids and needing something more to occupy their time. “We saw so many posts on social media about parents pulling their hair out, and we wanted to help contribute to keeping their kids busy,” she says. Villaggio Italiano sells approximately 10 to 15 kits per day for $10 each. Each kit comes with enough dough for a small pie along with mozzarella cheese and tomato sauce.
“It was so cute when customers started tagging us in their photos of the completed pies,” Matarazzo adds.
Matarazzo accepted the shutdown on in-restaurant dining because she says she knew that the measures were to stop the spread of COVID-19. At the same time, she knew it was going to substantially hurt the business financially as well as the pizzeria’s employees, but she stresses health comes before everything.
“The first few days of this new normal were very upsetting,” Matarazzo recalls. “To furlough staff, to see the drop in business, to know that employees that have worked with us for 15 to 30 years may not have a job was heartbreaking, but these were things that were out of our control, and we had to figure out how to operate under the new laws quickly.”
Sales dropped the first few days over 80%, Matarazzo notes, and the pizzeria had to let go 80% of its staff as well. The business halted all advertising, and the restaurant has been ordering less from vendors. But as time went on, the bottom line improved.
Right now, Villaggio Italiano still has two chefs, two additional pizza cooks, one person answering phones, and three delivery drivers. Delivery has picked up so much that Villaggio Italiano added two more drivers. “The phone rings off the hook, which we are eternally grateful for, and a lot of our customers are coming to pick up food, saying hellos and well wishes from a distance,” Matarazzo says.
Matarazzo admits the restaurant never wanted to push gift cards—which emerged in the early days of the shutdown as a quick way for restaurants to generate cash—because she was cognizant of customers also losing their jobs. “We decided to just operate to the best of our ability and see what happens, because there was nothing that we could do to change the situation at the moment,” she explains.
“There are some heartbreaking stories of beloved businesses failing, but there will be some interesting stories of adaptation and survival,” says Seth Brewer, co-owner of Al’s Bar in Lexington, Ky. “I hope we can count ourselves among that latter set when all is said and done.” Courtesy of Al’s Bar
Bars and restaurants in Kentucky were restricted to takeout, curbside pickup, and food deliveries the same week as New York State.
“Being a music venue and bar, we were dead in the water overnight,” says Seth Brewer, co-owner of Al’s Bar in Lexington, Ky.
Brewer says he and his business partner, Tim Small, took stock of how they could legally continue to operate and found that they could not: Kentucky State liquor laws had not yet been relaxed to allow restaurants and bars that serve food to sell alcohol to-go. There was a kitchen on-site, but it was in the final stages of a remodel, and Al’s wasn’t selling any food before the shutdown, so it could not pivot to food sales to make up for lost sales of alcohol.
What was worse, because of local governmental safety measures, Brewer says, they couldn’t get the kitchen inspected by the health department to roll out the backup plan, which was bringing in some restaurant colleagues who had lost their jobs to start selling food. “[It] would have given our friends some sort of an income, and would have given us a vehicle by which to comply with the executive order that permitted establishments selling food to sell drinks along with the food,” Brewer says.
Thus, sales flatlined—initially. But when Brewer and Small took another look at the tools at their disposal, they realized they had an asset: a beer package license, which had previously seemed like a nuisance to implement. Al’s Bar became Al’s Beer Store overnight.
“We realized we could become a beer store, so that’s what we did,” Brewer explains. “One of us has retail experience with a boutique bottle shop here in town, and with that knowledge of retail margins, and with the familiarity of the different beer distributors and their brands, we were able to turn our bar into a retail space.”
On a day-to day basis, the beer store has limited hours, from 4 p.m. to 8 p.m. (pre-pandemic, the bar was open from 5 p.m. through 2:30 a.m.), and the main bar has been converted into a display area for the beer being sold.
Initially, sales seemed to involve locals and regulars alone—those who wanted to do what they could to support the bar and its employees, according to Brewer. But as the weeks have worn on, those “sympathy tips” have diminished, and beer sales have been steady and increasing.
“We are satisfying a demand here in our neighborhood, selling mostly craft beer to a community that previously had to drive to get good beer or had to settle for whatever was available at the nearby gas stations,” Brewer says. “Customers have been asking us to keep doing this on the other end of COVID.”
Because of increased demand, many grocery stores may be unable to accommodate same-day grocery pickup or delivery orders, making it difficult for shoppers to restock on one or two key items without entering the store. Courtesy of Panera Bread
It’s not just mom-and-pop stops making dramatic changes. Panera Bread has redirected hundreds of its locations nationwide from catering to the lunchtime rush to selling kitchen staples. Beyond bread and bagels, Panera Grocery is selling produce and dairy items (from gallons of milk to Greek yogurt) for pickup and contactless delivery.
This is fully national, and participation includes franchisees and owned stores. Panera has approximately 2,200 locations nationwide, 15% of which have temporarily closed. Nearly every open café is participating. Of the remaining locations—just under 1,900—95% of them are fulfilling Panera Grocery orders.
“As the virus hit, we knew we needed to do more for our customers and their shifting needs,” says Panera CEO Niren Chaudhary. “Today, people everywhere are struggling to find essential items, secure timely grocery delivery options due to high demand and are looking to limit the amount of stops they make when doing essential errands.”
As time goes on, Chaudhary says Panera Grocery hopes to expand the program further and make even more grocery staples available to customers. As for whether Panera Grocery is kept around for the long-term, beyond the pandemic, nothing has been ruled out yet. “We will as always follow the consumer—it all depends on if our consumers continue to see value in having these grocery essentials available as we get to the other side of this crisis.”
There’s no secret sauce to survival
But these aren’t overnight success stories. Silicon Valley unicorns might make business model “pivots” seem natural, but successful ones are few and far between.
As the slower winter season was coming to a close, F.L.X. Hospitality had been in the midst of finishing construction and opening two new locations, with four more expected in May. Bates had just opened a new location for his F.L.X. Fry Bird restaurant in February, and business had been going well.
“Honestly, it was such a landslide, so it wasn’t until they began closing states that the situation was solid enough to digest. Even then it didn’t really settle in until they closed our [state],” Bates says. “No matter how on top of it we tried to be, we couldn’t make plans fast enough.”
When Gov. Andrew Cuomo announced on March 15 that New York State restaurants would be able to offer only takeout or delivery, Bates says he began to cry. After texting with his managers to prepare shutting down for an unknown period, he drove from restaurant to restaurant, to speak with the managers personally and then address the team. “I had to tell my entire team in a five-hour span that I no longer had work for them,” Bates says. “It was the hardest day of my life.”
“On shutdown day, I was terrified of what would happen to [the team] and offered them anything I had: food, shelter, clothes, anything they needed during this time,” Bates says. “If I had it, I offered to give it to them. Knowing that they are safe and stable has been a huge help.” Courtesy of F.L.X. Fry Bird
Following the shutdown in mid-March, the team decided to try to keep Fry Bird open for takeout, and added delivery. Bates asked a few of his most reliable team members to stay on, and promised to give it a go for a week. Every day grew busier. Every day, they brought another team member back. The hospitality group had just finished the final touches on the newly expanded F.L.X. Provisions space, including a tasting room and a gourmet goods pantry, on the day of the shutdown on March 15. The establishment had been scheduled to open two days later—and it did. But not as originally planned. The team scrambled, and the Super Secret Wine Shop opened instead.
Sales at Fry Bird have continued to fluctuate, and Bates admits business is down, but he says it’s not as down as it could be: “We just try and stay tight on efficiencies and roll with the punches. Overall, we have been able to keep some of the team employed, be responsible to the business, and not jeopardize our ability to weather this crisis.” Business at the Super Secret Wine Shop, however, has skyrocketed. Between the new, larger space and expanded set of offerings the shop is allowed to sell because of SLA (service-level agreement) changes, Bates says there is far more opportunity as well as the flexibility to do things he and his team have never done before.
“We cut our entire team and shut down every expense the Monday of the shutdown announcement,” Bates says. “I think that was absolutely imperative for us in ensuring that we are able to survive this crisis. Depending on how long this lasts—there is a point at which we won’t be able to do so—but, thankfully, because of that reaction, we have a bit of time we can weather this. Those decisions ensured that, on the other side of this, we can rebuild those jobs, the tourism draw, and eventually, the economy around us.”
F.L.X. Hospitality has applied for assistance from the Paycheck Protection Program, but like many other applicants, the company is awaiting approval. “Even if the funding comes through in the coming weeks, the guidelines on forgiveness and repayment are still not clarified, making taking that money terrifying,” Bates says.
The way we were
Bates isn’t sure if restaurants will go back to the way things were, speculating it’s still too early to predict. “Personally, I believe we need contact as people. I hope the outcome is that we want to connect more—no more being on our phones during dinner, but actually engaging those around us, Bates says, underscoring the model for one of his restaurants, F.L.X. Table : a 14-person chef’s menu restaurant inspired by a dinner party. He hopes that’s what we all come out of this craving.
“People are learning that social deficiency is no different than a nutrient deficiency: It’s something we crave and need,” Bates says. “That being said, our ‘normal’ changes every day right now. For now, next week’s news is unknown, so trying to predict next month is simply a game in wasting time for us.”
Restaurants in New York have been told dining rooms are shut down through at least May 15, and that may come to pass for restaurants in upstate counties, compared with New York City, which is expected to be on a much longer timeline to reentry. And while Bates admits that might be great given that it’s only a couple of weeks away, he says the worst thing would be to reopen before customer confidence is rebuilt. Instead, he doesn’t plan for a full reopening before June 15, at least. “I am well aware it can go longer than that, but it does no good to speculate when there are so many things that need attention and thought that affect us today,” Bates says.
Still, Bates remains optimistic. “Once we got over the sadness and depression, and began doing what we do—creating—I wake up every morning excited,” he says. “I can’t wait to make this spreadsheet, or try this new idea, or reach out to these people about a collaboration.”
The team at Villaggio Italiano have already started to think about how the business model needs to change upon reopening, starting with removing 30% of tables in the dining room to enable more physical distancing between patrons. There will also be hand sanitizer on each table available for people to use in addition to staff changing linens more frequently, using different cleaners, and making sure to minimize or do away with any plastic in the dining room.
“My personal opinion is that whenever something life-changing happens, people change temporarily and eventually go back to what they know,” Matarazzo says. “I think this has been so impactful that it will take time, maybe even several months, and you will see people go back to their normal routines again. Depending on medical and governmental updates will determine whether our staff will be in gloves and masks.”
As far as the long term, Matarazzo expects to ramp up delivery and takeout, while understanding in-restaurant dining might be slow for quite some time after reopening. “We can only base this on the present circumstances and hope that things get better in time,” she says. “I know I speak for myself and my staff, we look forward to hugging everyone again.”
While he admits that the pivot to running a beer shop “started off as an act of desperation,” Brewer says that the solution—however temporary it might be—was the lifesaver. While the hope is to go back to service by the drink, Brewer is pleased with the success—albeit mild—so far, and will likely continue to provide and advertise to-go specials once back to regular service.
Nevertheless, Brewer thinks it’s going to take some time for people to get back to trusting a public, social environment, and it’s going to be tough for managers to navigate that. “The nature of going out and being around strangers in an enclosed space is an odd concept already,” he says. “Hell, with the isolation and social conditioning, even the act of shaking someone’s hand now seems bizarre and alien.”
In the short term, Brewer says the bar has to keep pushing what the business is legally able to do: selling beers to-go. However, he argues, there simply isn’t a long-term view right now. “So many of us small-business owners don’t have the cash reserves or revenue options to keep fighting this, and even with deferment of payments and hoping for the best, debt down the road is still debt,” Brewer says. “If this goes on for another six months, we’re closed. It’s as simple as that.”
More coronavirus coverage from Fortune:
—Bill Gates explains how to beat the coronavirus pandemic
—Elective surgeries—mostly paused as a result of the pandemic—are critical to hospital finances
—The World Health Organization says 3 more coronavirus vaccines are in human trials
—Late payments soar, revealing the extent of coronavirus pain on European companies
—14% of women considered quitting their jobs because of the coronavirus pandemic
—Forget “wet markets” and bats: For scientists, failing environmental policies have created a boom time for outbreaks
—Out of work, but not unemployed: How much Europe is paying its idled workers
—PODCAST: COVID-19 might have upended the concept of the best companies of the year
—VIDEO: 401(k) withdrawal penalties waived for anyone hurt by COVID-19
Subscribe to Outbreak, a daily roundup of stories on the coronavirus pandemic and its impact on global business, delivered free to your inbox.


fortune--2020-04-29--Which video chat app is best for security?

This is the web version of Data Sheet, Fortune’s daily newsletter on the top tech news. To get it delivered daily to your in-box, sign up here.
Virtual conferencing software—most notably Zoom, despite many recently uncovered vulnerabilities—is surging, as this newsletter has noted often.
The U.S. government considers the remote-working trend to be a matter of national security. The National Security Agency recently released an assessment of 13 of the most popular commercial video chatting tools. In a statement accompanying the report, it said, “By following the practical guidelines, users can draw down their risk exposure and become harder targets for malicious threat actors.”
The NSA’s highest marks went to Facebook’s WhatsApp, Signal (whose code WhatsApp uses), and rival chat app Wickr. Some of the grading criteria: Does the service use end-to-end encryption, which blocks eavesdroppers and snoops? Does it have multi-factor authentication, an option that securely locks down user accounts? Is the technology based on publicly inspectable, open-source code, which is considered more secure than inscrutable proprietary software?
Every other service has at least one deficiency, in the eyes of the NSA. Google G Suite and Microsoft Teams lack end-to-end encryption and do not use open source code. Cisco Webex, Zoom, Slack, and Skype for Business have suboptimal data deletion policies. GoToMeeting has no multi-factor authentication option. SMS texting fails on pretty much all fronts.
The report isn’t comprehensive. The NSA makes no attempt to rate code bugginess, nor the prevalence of exploitable vulnerabilities; any discussion of Zoom “zero-days” or Microsoft Teams GIF attacks are out of scope. Facebook’s innumerable privacy breaches garner no mention.
John Scott-Railton, a security researcher, griped in a tweet that the report took Zoom’s claims of implementing end-to-end encryption at face value, despite his research indicating otherwise. And perhaps most strangely, the report entirely omits a review of Apple’s FaceTime, a service frequently praised by security experts.
In their breakneck quests to attract large followings, tech companies often disregard safety measures and proper audits, a decision that juices growth but ultimately hurts users in incalculable ways. As Jeffrey Vagle, an assistant professor of law at the Georgia State University College of Law, notes in a perspicacious piece for the security blog Just Security, businesses all too often fall prey to bad incentives, optimizing for growth rather than security.
A moral hazard, as economists call it.
***
Tune in
If you enjoyed last week’s live Data Sheet conversation, I’ve got good news to share. Today, Adam Lashinsky, Fortune’s executive editor and usual Data Sheeter, will be chatting over Zoom with longtime tech analyst Gene Munster about how he sees the investing environment playing out.
The call is live on Wednesday, April 29, at 10:00 Pacific/1:00 Eastern. They’ll take your questions via chat. (This call will be audio only: You have permission to multi-task.)
Register here for free. Or, watch the live stream without registration here.
Robert Hackett
Twitter: @rhhackett
Email: robert.hackett@fortune.com
THREATS
Contact lenses. Apple's and Google's "contact tracing" app project—now called "exposure notification"—started as a small endeavor, codenamed "Bubble," spearheaded by a handful of employees at Apple, CNBC's Christina Farr reports. After less than a month of development, the tech is due out on Friday. Meanwhile, the United Kingdom has broken with growing international consensus and plans to run its own version of a contact tracing app on centralized British servers, versus the decentralized phone-to-phone approach preferred by tech companies in America.
Robots wanted. Facebook has reorganized some of its security teams, the New York Times reports. The company is doubling down on investments in automated threat detection, displacing more than two dozen employees in the process. Meanwhile, higher up in the organization, CEO and founder Mark Zuckerberg is consolidating power. Five members of Facebook's nine-person board—many of whom butted heads with Zuckerberg over regulatory issues—either have been or are in the process of being replaced, notes the Wall Street Journal.
Singing the blues. An employee of the controversial surveillance tech firm NSO Group, now being sued by Facebook's WhatsApp over hacking allegations, once abused the company's phone-hacking tools to target a love interest, Vice Motherboard reports. The company allegedly fired the employee shortly over the breach. Speaking of reprehensible things, Damien Patton, the CEO of Banjo, a Softbank-backed data-mining startup, admitted to being a neo-Nazi skinhead in his youth, OneZero reports. (Patton says he is making amends "for this shameful period in my life.")
Hammers see only nails. Phone-hacker Cellebrite, whose tech allegedly helped the FBI get into that San Bernardino terrorist's iPhone in 2016, is pitching itself as a way for governments and law enforcement to fight the spread of COVID-19. The company said in a sales email that it can siphon data off locked phones to obtain contacts and location data that police can use to "quarantine the right people," Reuters reports.
This guy should have worn Groucho glasses.
ACCESS GRANTED
Software is eating the world—including the justice system. Parolees around the country are being asked to download a smartphone app, Guardian, that's designed to track their whereabouts. Gizmodo interviewed recently incarcerated people under Guardian's surveillance, plus security experts, and found the app to be buggy, insecure, and thwarting people's reintegration into society. Here's one troubling testimonial:
“I’d wake up crying,” she says. Sometimes, when she tried to authenticate her location or check in the app would tell her it didn’t recognize her voice. “I’d feel so tired, and I thought if I didn’t answer, I was going to go back to prison.” Soon, she says, she was “begging my parole officer to put an ankle monitor on me.”
FORTUNE RECON
Tesla earnings: 4 things to watch for on Wednesday by David Z. Morris
To reopen the economy, there are 5 guidelines we need to follow by W. Bowman Cutter, Joseph E. Kasputys, Joseph J. Minarik, and Lori Esposito Murray
How A.I. may make sense of 50,000 coronavirus research papers by Jonathan Vanian
The venture capitalist at the center of the coronavirus fight by Lucinda Shen
Alphabet’s and Facebook’s upcoming earnings are expected to be bad. The question is how bad? by Danielle Abril
ONE MORE THING
Perspective is everything. Photographers for a Danish TV station, TV2, snapped deceptive pictures of Copenhageners from different angles using two types of camera lenses. Depending on the shot, the subjects either appear as though they're practicing social distancing, or smooshed together, as though flagrantly defying orders to stay apart.
You don't need a deepfake A.I. techniques to fool people with images. Says Ólafur Steinar Gestsson, one of the lensmen, "When we read a text, we have learned to be critical of the sender and the content. We should feel the same way with pictures."


fortune--2020-04-29--Facebook creates the most ‘human’ chatbot yet

Chatbots have enormous potential applications in customer service and sales. And in the battle to build a better chatbot, Facebook just scored a big win.
Researchers at the social media giant have created a chatbot that can hold extended, open-ended conversations that are more humanlike than any existing software, the company said Wednesday.
“This is the first time a chatbot has learned to blend key conversational skills—including the ability to assume a persona, discuss nearly any topic, and show empathy,” Facebook said in a blog post.
In fact, judges, who were recruited through Amazon’s Mechanical Turk service for freelancers, said they liked talking to Facebook’s chatbot almost as much speaking to a real human being, with evaluators saying they preferred short conversations with the chatbot 49% of the time when pitted against a similar human-to-human dialogue. “This indicates that we are pretty close to human-level performance,” Stephen Roller, one of the Facebook engineers who worked on the project, said.
Most commercially available chatbots, such as familiar digital assistants like Amazon’s Alexa or Apple’s Siri, are designed to be adept at dialogues around a set of specific tasks: telling you the weather forecast or giving you directions to the nearest post office. These are the sorts of “skills” Amazon is constantly adding to Alexa, for instance.
The type of chatbot the Facebook researchers built is different. Called an “open domain chatbot” it is designed to be able to hold a conversation on any topic. “It can talk to you about literally anything—whether that is what you had for breakfast this morning or what cereals are healthiest to feed your kids to your favorite sports team,” Roller said.
The chatbot, which Facebook calls Blender because of the way it can “blend” various skills needed for successful conversations, was also tested against dialogues produced by a previous record-holding chatbot called Meena that was created earlier this year by Facebook’s cross–Silicon Valley rival Google.
Blender blew Meena out of the water, with 67% of evaluators judging Blender more human-sounding and 75% saying they’d rather have a long conversation with Blender than Meena.
Although powerful chatbots have obvious commercial applications, Facebook said it had no immediate plans to turn Blender into a product. The company does, however, already have chatbot interfaces that third parties can use inside its Messenger messaging application, and its WhatsApp messaging platform also allows businesses to use chatbots. “This is purely research at this point,” Emily Dinan, another research engineer who worked on the project, said. “We are not currently looking to productionize it.”
Facebook’s researchers cautioned that Blender still “has many weaknesses compared to humans,” including instances in which it contradicts prior statements, repeats itself or even invents factually inaccurate information, issues that are likely to become more apparent the longer a conversation lasts. The benchmark studies were conducted using dialogues that consisted of 14 “turns,” or back-and-forths between interlocutors.
The chatbot can remember information only stretching back several conversational turns, and so is more likely to repeat itself in longer conversations, Dinan said.
The Blender chatbot has also been trained to operate in English alone so far, and Dinan acknowledged that other languages may present more challenges to creating a chatbot that can navigate the appropriate use of formal and informal tenses and honorifics with the same fluency as humans.
Most recent breakthroughs in natural language processing—the kind of A.I. that can analyze and manipulate language—have been the result of using algorithms that ingest massive amounts of data about relationships between words and training them on very large sets of text examples.
The new Facebook chatbot is no exception. It uses an algorithm that can look at 9 billion variables. It is so large that the neural network, a kind of artificial intelligence software loosely modeled on the way the human brain works, cannot fit on a single computing device. Instead its workload has to be distributed among several machines that process information in parallel. (The company also created a smaller version, that takes in 2.7 billion variables.)
The chatbot—which uses a software design first pioneered by Google in 2017—was also trained on a very large number of examples. In this case, Facebook used 1.5 billion examples of dialogue taken from Reddit.com discussion groups to provide its algorithm with an initial grounding in how conversational language works.
But crucially, Facebook says that its real innovation was then fine-tuning the software on four smaller data sets. One, called the Wizard of Wikipedia, trains the chatbot to convey factual information from the online encyclopedia, display expert knowledge, and answer specific factual questions. Another, called PersonaChat, teaches the algorithm how to emulate a certain character and add information about that character’s personal background into a dialogue. A third module, called Empathetic Dialogues, as the name suggests, helps the algorithm learn how to recognize emotions and respond empathetically.
Having been trained on each of these models individually, the chatbot’s abilities are then perfected using a new data set dubbed Blended Skills Training, that teaches it to integrate all three skills from the previous training. This enables the chatbot to recognize and adapt to changes in its human interlocutor’s tone, such as switching from joking to serious. It also learns when it’s most appropriate to mention that Little Rock is the capital of Arkansas and when it would be better to talk about how much it likes German shepherds or say how sorry it is that your goldfish died.
Previously, tech companies have sometimes run into trouble when making open domain chatbots publicly available. Microsoft researchers released an open domain chatbot called Tay in 2016. The researchers thought the chatbot would perfect its conversational skills through interaction with users. Instead, users soon succeeded in teaching the chatbot to make racist remarks.
Dinan said that with Blender, the researchers were well aware that it might have learned racist or sexist conversations, particularly from its pre-training on Reddit dialogues. But she said that the researchers found fine-tuning the process on the Blended Skill Talk data reduced the risk of the chatbot making offensive comments. She said that Facebook had also researched systems that would automatically detect offensive language and screen it out, which could be applied to Blender’s output in the future. More must-read tech coverage from Fortune: —Who is new AT&T CEO John Stankey?
—Work-from-home tips from the executive team that brought you Zoom
—Is A.I. better at diagnosing illnesses than doctors? Don’t believe the hype
—Facebook debuts Zoom-like video chat feature called Messenger Rooms
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEOs
—WATCH: Zoom’s ups and downs since the coronavirus crisis
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-04-29--An unknown in Google and Facebook’s numbers

Not even the tech giants with massive cash piles are immune from the coronavirus.
An early sign: Google’s parent company, Alphabet, suffered a “significant and sudden slowdown in ad revenue” during the first quarter of the year, said Sundar Pichai, even while total revenue for the period rose 13% to $42.2 billion.
Indeed advertising revenue in offerings like Google search are tracking 10% down year over year, as major advertisers, such as those in travel and entertainment, are taking a direct hit from the global lockdown.
Another question for giant ad businesses like Google’s: What percent of their clients are startups? Profitless and money-guzzling companies seeking to upend traditional retailers and banks have spent billions on advertising in a bid to scale up fast. Mattress seller Casper, for example, spent roughly a third of its 2019 net revenue on sales and marketing.
A JPMorgan note from earlier this year suggests that percentage is no negligible amount. Demand for cloud services and digital advertising in the past couple years has reportedly amounted to about 10% of Google, Facebook, and Amazon’s revenues. And that’s not even counting the broader universe of small-and-medium-sized businesses—which Google clearly cares about.
Now, as venture capital funding is expected to contract, portfolio companies are expected to suddenly go from blitzscaling to cost-cutting. Startup risk is real even beyond the ad business—and could especially hurt businesses that have built themselves on other young companies. It’s a risk venture capitalists are watching.
“We are evaluating what kinds of risks are associated with a company when it comes to their end customer [which may be suffering from the coronavirus],” says Floodgate Partner Ann Miura-Ko. “We have to think through if the majority of the clients are travel companies, or, say, what percentage are startup companies.”
Facebook, another ad-based business, is expected to report earnings today.
The coronavirus only hit the Western world in the latter half of the quarter. Analysts think the worst is yet to come.
The KKK pastof a SoftBank-backed startup founder: Sometimes things slip through even the tightest background checks. A past tie with the KKK is only now beginning to resurface, three decades later, for Damien Patton, founder of SoftBank-backed surveillance startup Banjo. In 1990, Patton was involved with the Dixie Knights of the Ku Klux Klan and had been a part of a shooting of a synagogue, according to a grand jury testimony reviewed by OneZero. But thanks to a typo by an FBI agent, Patton was re-christened as “Damion” in filings around the incident—covering his past as Banjo raised $220 million over the past decade, per the story.
In response to the story, Patton said he is now trying to make amends “for this shameful period in my life.”
Since the story surfaced, however, the Utah attorney general’s office and the University of Utah have said they will suspend their contracts with Banjo.
Tune in: Don’t miss Fortune executive editor Adam Lashinsky’s Zoom chat with longtime tech analyst Gene Munster about how he sees the investing environment playing out. Watch the conversation and join the Q&A Wednesday, April 29, at 10:00 Pacific/1:00 Eastern. Register here for free. Or, watch the live stream without registration here.
VENTURE DEALS
- Stash, a New York-based banking and investing services, raised $112 million in Series F funding. LendingTree led the round, and was joined by investors including T. Rowe Price Associates, as well as Breyer Capital, Goodwater Capital, Greenspring Associates, and Union Square Ventures.
- Mojo Vision, a Saratoga, Calif.-based company developing AR contact lenses, raised over $51 million in a Series B-1 funding. New Enterprise Associates led the round, and was joined by investors including Gradient Ventures, Khosla Ventures, Liberty Global, Struck Capital, Dolby Family Ventures, Motorola Solutions Venture Capital, Fusion Fund, Intellectus Partners, KDDI Open Innovation Fund, Numbase Group, InFocus Capital Partners, and others.
- Niche, a Pittsburgh, Pa.-based school search platform, raised $35 million in Series C funding. Radian Capital led the round, and was joined by investors including Salesforce Ventures, and existing investors Allen & Company and Tim Armstrong.
- Catalyst, a NYC-based SaaS platform for customer retention, raised $25 million in Series B funding. Spark Capital led the round, and was joined by existing investor Accel.
- Amply Power, a Los Angeles-based electric charging startup, raised $13.2 million in funding. Soros Fund Management and Siemens are among the investors. Read more.
- Tecton.ai, A San Francisco-based data platform for machine learning, raised $25 million in seed and Series A funding. Andreessen Horowitz and Sequoia co-led the deal.
- Deliverect, a Belgian-based online food delivery management software maker, raised $18 million in Series B funding. OMERS Ventures led the round, and was joined by investors including existing investors Newion and Smartfin.
- Topia, a San Francisco-based platform to deploy, manage, and engage employees, raised $15 million in Series D funding. NewView Capital, Notion Capital, and Workday Ventures were the investors.
- Vutiliti, a Salt Lake City-based smart utility monitoring company, raised $11.8 million in Series A funding. Constellation Technology Ventures and Cycle Capital Management led the round, and were joined by investors including Chevron Technology Ventures, University Venture Fund, and the Kickstart Seed Fund.
- HeartVista, a Los Altos, Calif.-based maker of AI-assisted MRI solutions, raised $8.7 million in Series A funding. Khosla Ventures, Jeff Rothschild, Leslie Ventures, Open Field Capital, and more led the round.
- Covered by SAGE, a New York-based tech-enabled property and casualty insurance brokerage, raised $6 million in seed funding. NFX led the round, and was joined by investors including Tectonic Capital and Treasury.
- AppGyver, a Helsinki, Finland-based app development platform with visual programming tools, has raised €2 million ($2.2 million) in funding. Karma Ventures and OpenOcean were the investors.
- Bonsai, an online platform virtually pairing students and young professionals with mentors in professional fields, raised $1.5 million in pre-seed funding from a network of angels. Read more.
- Newsbytes, a Gurugram, India-based AI-driven digital news startup, raised $1.5 million in Series A funding. North Base Media led the round. JITO Angels and existing investor, Powerhouse Ventures also participated. Read more.
- Premama Wellness, a Providence, R.I.-based producer of postnatal care supplements. Financial terms were not disclosed. District Ventures Capital was the investor.
PRIVATE EQUITY
- Orion Innovation, backed by One Equity Partners, acquired Tekmark, a Edison, N.J.-based outsourced technology and telecom services firm. Financial terms weren't disclosed.
OTHERS
- Blackstone says its proposed 1.36 billion euro ($1.47 billion) takeover of NIBC Holding NV, a Dutch bank, may not win regulatory approval.
- NIO Inc., a Chinese electric vehicle maker, raised 7 billion yuan ($1 billion). The Hefei municipal government led the funding. Hefei Construction Investment Holding, CMG-SDIC Capital Management, and Anhui High and New Technology Industrial Investment are also investors. Read more.
- UnitedHealth Group’s Optum is in advanced talks to acquire AbleTo, a New York-based telehealth services company, for about $470 million. Read more.
- A former Anbang Insurance Group unit is suing Mirae Asset Global Investments for missing a deadline to acquire 15 U.S. hotels from Anbang for $5.8 billion. Read more.
- Cresco Labs canceled plans to acquire Tryke Cos., a cannabis cultivator and processor with facilities in Nevada and Arizona, for $282.5 million. Read more.
IPOs
- Jaws Acquisition, a Miami Beach, Fla.-based blank check company founded by Starwood Capital founder Barry Sternlicht and Brown University endowment CEO Joseph Dowling filed to raise $400 million. The company plans to acquire a business outside of real estate, lodging, as well as oil and gas and energy infrastructure. Read more.
- Lyra Therapeutics, a Watertown, Mass.-based biotech developing drug and delivery solutions for ear, nose, and throat diseases, plans to raise $53 million in an offering on 3.5 million shares priced between $14 to $16. It has yet to post a revenue and posted losses of $16.3 million in 2019. Perceptive Advisors (32.4% pre-offering) and North Bridge Venture Partners (17.3%) back the firm. It plans to list on the Nasdaq as “LYRA.” Read more.
EXITS
- Blackstone acquired a 10% stake in Melco Resorts & Entertainment, a Macau casino operator, for about A$551.6 million ($359.04 million), which represents a discount of 5.2% to the stock's last closing price. Read more.
F+FS
- FIS (NYSE: FIS) launched FIS Ventures, which plans to invest $150 million in fintech startups over the next three years.
- Manna Tree Partners raised $141.5 million for its first fund Manna Tree Partners Fund I focused on wellbeing.
PEOPLE
- Bain Capital Ventures added Clelia Warburg Peters as a Venture Partner, focused on proptech.
- Expa hired David Clark as a Partner.


fortune--2020-04-29--Boeing to cut staff by 10% after reporting $641 million loss

Boeing reported a loss of $641 million in the first quarter Wednesday. The aerospace manufacturer also announced it would cut 16,000 employees—10% of its staff.
The firm’s 737-MAX woes had already forced production to slow, but the collapse of global air travel amid the pandemic has further reduced its orders. The company’s revenue fell 26% in the first quarter to $16.9 billion. The firm also announced plans to scale back production of the 787 Dreamliner and the 777.
Boeing reported burning through $4.3 billion in cash during the first quarter. And the company’s total consolidated debt climbed 42% to $38.9 billion from last quarter.
“Access to additional liquidity will be critical for Boeing and the aerospace manufacturing sector to bridge to recovery, and the company is actively exploring all of the available options. Boeing believes it will be able to obtain sufficient liquidity to fund its operations,” the company wrote in its first-quarter earnings report.
Boeing could still be the benefactor of a federal bailout. The stimulus package passed in March set aside $17 billion in economic relief aimed at Boeing.
A Barclays report published on March 30 points to Airbus coming out of the crisis “much better” than Boeing because of a higher backlog of orders and a stronger balance sheet, among other reasons.
The big question for Boeing and U.S. aerospace travel return? The Barclays report said it’s “virtually impossible to predict how much global traffic will decline in 2020 and potentially recover in 2021.”
Once governments do start to ease shutdowns, citizens might balk at jumping right back on planes. A Fortune-SurveyMonkey poll conducted in mid-April found 71% of U.S. adults wouldn’t consider flying until at least four months from now. And 43% of frequent flyers said the same.
Boeing, which is the backbone of the entire U.S. aerospace industry, and its struggle to rebound will have long-term impacts for its massive network of suppliers like engine maker GE Aviation.
Our mission to help you navigate the new normal is fueled by subscribers. To enjoy unlimited access to our journalism, subscribe today.
More must-read stories from Fortune:
—What the law says about forcing employees back to the office
—A.I. will be crucial to non-tech companies—and they need a new playbook for it
—Which companies’ stocks will thrive after the coronavirus crash?
—Everything you need to know about furloughs and what they mean for workers
—What to know if your small business is applying for Round 2 PPP loans from the SBA
—PODCAST: How 2 CEOs outside of health care decided to pivot to fight COVID-19
—WATCH: Why the banks were ready for the financial impact of coronavirus
Subscribe to Outbreak, a daily newsletter roundup of stories on the coronavirus pandemic and its impact on global business. It’s free to get it in your inbox.


fortune--2020-04-29--Gilead says COVID-19 recovery drug hit primary target

Gilead Sciences Inc. said data from a U.S. study of its drug remdesivir showed the medication had met the primary endpoint in a trial of its effectiveness in treating COVID-19.
The company said in a statement that it is aware of positive data emerging from the National Institute of Allergy and Infectious Diseases’ study of remdesivir for treating the disease caused by the novel coronavirus.
Gilead shares were halted, but the news appeared to lift the entire U.S. stock market, with futures linked to major U.S. indexes jumping after the company’s statement was issued.
The U.S.-run trial looked at whether patients getting Gilead’s drug recovered from the disease faster than patients getting a placebo treatment plus standard care for the illness.
The trial, run by the National Institutes of Health, aimed to sign up about 800 patients to test the drug and give a definitive answer as to whether it can help treat the illness.
A NIAID representative didn’t immediately respond to a call seeking comment.Remdesivir, which was originally developed to treat other coronaviruses like SARS and has also been tested on Ebola, isn’t licensed or approved for use anywhere in the world.
More coronavirus coverage from Fortune:
—What the law says about forcing employees back to the office
—Alphabet and Facebook earnings are expected to be bad. The question is how bad?
—How the U.S. should invest in public health before reopening the economy
—Tech issues and backlogs hit the SBA’s second round of PPP loans
—There may be 22 hidden coronavirus hotspots in states poised to lift restrictions
—Coronavirus brought China’s travel industry to a standstill. Now it’s showing signs of life
—The coronavirus pandemic is impacting critical research into neuromuscular diseases
—PODCAST: How 2 CEOs outside of health care decided to pivot to fight COVID-19
—WATCH: Fortune’s top 10 heroes of the coronavirus pandemic
Subscribe to Outbreak, a daily newsletter roundup of stories on the coronavirus pandemic and its impact on global business. It’s free to get it in your inbox.


fortune--2020-04-29--The next round of stimulus checks goes out this week—here’s everything to know if you are still wait

The next round of stimulus checks goes out this week—here’s everything to know if you are still waiting

You know the feeling. All of your friends have woken up to find $1,200 freshly deposited in their bank accounts by the Internal Revenue Service; you, on the other hand, are still waiting for your stimulus check.
Perhaps the IRS didn’t have your direct deposit information on file, leaving you to either wait (potentially months) for a paper check to arrive in the mail, or to try to navigate the flaky “Get My Payment” website.
If so, you may not have to wait much longer. The IRS is set to launch its next round of stimulus payments this week—meaning that if you’re not one of the 89.5 million Americans who have received nearly $160 billion combined from the government, your piece of the pie could be on its way. Here’s the rundown on where things stand and what to expect.
Who is next in line to receive stimulus checks?
If the IRS did not previously have your direct deposit information on file, but you were among the first wave of people to use its “Get My Payment” portal to provide that information following its April 15 launch, you’ll likely receive your stimulus payment by the end of this week via direct deposit. That include tax-filers who hadn’t previously provided their bank account information to the IRS, as well as eligible non-filers who entered their information via the “Get My Payment” portal.
Additionally, payments should be arriving as soon as this week for those receiving Social Security benefits and railroad retirement benefits, and as soon as early May for those receiving Supplemental Security Income (SSI) and Department of Veterans Affairs benefits.
How can I find out when I will receive my stimulus check?
If you used the “Get My Payment” website to enter your direct deposit information on “any day until noon on Tuesday,” your payment date will be available to you in the portal “beginning the following Saturday,” according to the IRS. If you entered your bank account information after that noon Tuesday deadline, then your payment information should be available in the portal “beginning the Saturday after next.”
So if, for example, you entered your direct deposit details into “Get My Payment” by noon ET this Tuesday, April 28, your payment date should be available beginning this Saturday, May 2. If you provided those details after noon ET on Tuesday, your payment date won’t be available until the following Saturday, May 9.
The “Get My Payment” portal isn’t working for me. What should I do?
You’re not alone. The online tool has been plagued by complaints from users, many of whom have been unable to log in and access its services despite being eligible for stimulus payments.
While the IRS initially brushed off complaints in claiming the website was “operating smoothly and effectively” after its launch earlier this month, the agency announced “significant enhancements” to the portal earlier this week (though it stopped shy of specifying just what those enhancements are).
In order to log in to “Get My Payment,” you need to enter your Social Security number (or Individual Taxpayer Identification Number), date of birth, street address, and zip code. Once logged in, if you’d like to provide your direct deposit banking information, you’ll also need to verify your adjusted gross income from your most recent tax filing, and the amount that was refunded to you or which you owed in taxes that year—so it would be a good idea to have your tax return on hand.
And if you still can’t log in to the portal? Here’s a neat little trick: try entering your street address in all caps.
Can I change the existing bank account information I have on file with the IRS?
No. If your bank account information has changed since you last filed your taxes, or if you’d rather have the money deposited into a different bank account, the IRS will not allow you to change or update the bank account information currently on file. The agency says this is to “help protect against potential fraud.”
If the existing bank account on file with the IRS has been closed and/or is no longer valid, the bank will reject the direct deposit and the IRS will mail a paper check to the address it has on file.
Can I change the mailing address I have on file with the IRS?
No, the IRS will not allow you to change your mailing address via the “Get My Payment” portal. If you opt to receive a paper stimulus check in the mail, it will be sent to the most recent address on file with the IRS. If you’ve yet to file your 2019 tax return, the agency suggests filing as soon as possible with your new address in order to update your records.
I’m not providing my direct deposit information to the IRS. How long does it take to receive a stimulus check via mail?
Potentially months. The government is able to process, print, and send only roughly 5 million checks a week—so if you’re not receiving your payment electronically, be prepared to wait.
Once your paper stimulus check is mailed, it will take up to 14 days to receive the payment, according to the IRS.
Our mission to help you navigate the new normal is fueled by subscribers. To enjoy unlimited access to our journalism, subscribe today.
More personal finance coverage from Fortune:
—What to do if you can’t pay your bills this month
—Stimulus checks are depositing: How people are spending the money
—Couldn’t track your stimulus check? Errors and long waits plague IRS portal rollout
—What you should know about mortgage forbearance and skipping payments
—Furlough vs. layoff? What to know about your rights and benefits
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—VIDEO: 401(k) withdrawal penalties waived for anyone hurt by COVID-19
Subscribe to Fortune’s Bull Sheet for no-nonsense finance news and analysis daily.


fortune--2020-04-29--An energy CEO considers how to ‘reopen’

An energy CEO considers how to ‘reopen’

Good morning, Broadsheet readers! Sen. Elizabeth Warren and Rep. Alexandria Ocasio-Cortez want to pause mergers and acquisitions, men’s and women’s tennis could come out of the pandemic as a single organization, and an energy CEO explains how she’s tackling the question of reopening. Have a nice Wednesday.
– An energy CEO considers ‘reopening’. An especially-pressing question these days is how and when to reopen business. It’s being debated at the state and federal level in the U.S., with individuals firms having to contend with resulting the patchwork of policies. One CEO navigating the maze is Duke Energy chief executive Lynn Good, No. 19 on Fortune‘s Most Powerful Women list, who spoke with Fortune‘s Susie Gharib in an interview published Monday.
Good took a stab at the overarching question of reopening, walking Susie through Duke’s approach. It starts—like so many things these days—with a in-house task force, which will evaluate how to bring employees back to their physical workplaces in a manner Good described as “gradual, staggered, deliberate, thoughtful.” Safety of employees, she says, is the guiding principle.
“I see scenarios where we’re staggering hours, we’re staggering days, different states are coming back at different times,” she said. Duke is already employing temperature checks and voluntary coronavirus testing of employees who aren’t working from home—those at power plants, for instance—to give workers “confidence” about their own wellbeing, and she expects those practices to continue, at least in the short term.
Communication too is key. Duke has created videos, podcasts, and open forums to keep employees informed, and it’s gone as far as sending fliers to workers’ homes as a way to share safety information with their households. “We’ve found that family members are also concerned,” she said.
No doubt it’s an unprecedented time for any leader, with no event in modern history providing a blueprint for how to respond. Good says she’s narrowed her focus; it’s two-fold—taking care of customers and taking care of employees. In times of crisis, she says, “priorities become very clear, very quickly.”
You can watch the entire interview here.
Claire Zillman
claire.zillman@fortune.com
@clairezillman
Today’s Broadsheet was produced by Emma Hinchliffe.
ALSO IN THE HEADLINES
- Professorial expertise. Harvard Business School professor Rebecca Henderson has long tried to get American business leaders to realize that there's a cost to gutting the social safety net. The impact of the coronavirus crisis has prompted more people to embrace her ideas for reimagining capitalism, Henderson tells Fortune's Katherine Dunn. Fortune
- United to press pause. Sen. Elizabeth Warren and Rep. Alexandria Ocasio-Cortez collaborated on a long-shot proposal: halting all corporate mergers during the coronavirus crisis. The pair worry that while small businesses struggle, large companies could expand their hold on the U.S. economy. Bloomberg
- Trapped on the ticket? The Cut's Rebecca Traister writes about what she dubs "The Biden Trap." The sexual assault allegations brought against the presumptive Democratic nominee by former staffer Tara Reade—and new corroboration of those allegations, which Biden denies—are emerging at the same time as Biden finalizes his female VP pick. Whichever woman ends up his vice president will be "drinking from a poisoned chalice," writes Traister. The Cut
IN CASE YOU MISSED IT
- Cloud competitors. With usage surging, video-chat service Zoom needed more cloud infrastructure. The company chose Oracle, led by CEO Safra Catz, for its new cloud deal, rather than Microsoft or Amazon. CNBC
- Tale of two leaders. This piece compares and contrasts the recent leadership of President Trump and German Chancellor Angela Merkel. The pair were "never destined to hit it off," but their responses to the global pandemic have made clear exactly how different they are. Bloomberg
- Grand slam. One possible outcome of the coronavirus sports shutdown? The merger of men's and women's tennis. Roger Federer brought up the idea, long championed by Billie Jean King, on Twitter this week. King says that "it's the right thing for the sport" and that the current crop of men's players are so different than the male athletes who rejected her proposal decades ago. New York Times
- All about Kayleigh. Curious about the new White House press secretary, Kayleigh McEnany? Read this profile to learn about how she got on the Trump train early, when a friend (and a Democrat) advised her that backing the then-longshot candidate would help her stand out. New York Times
ON MY RADAR
Coming soon: New fiction from Simone de Beauvoir New York Times
Oprah Winfrey is the class of 2020's official commencement speaker, thanks to Facebook CBS News
Nannies tell the truth about working during the coronavirus The Cut
Alaska Girl Scouts received PPP loan for lost cookie sales Fortune
PARTING WORDS
"This is going to save someone’s life and I want it to be perfect."
-Trina Bird, a Ford factory worker now manufacturing ventilators


fortune--2020-04-29--GDP shrinks 4.8%—but what comes next will be far worse

The economy had its worst contraction since 2008.
In the first quarter of 2020 the U.S. real GDP declined by 4.8% from the same period a year ago, according to data published Wednesday by the U.S. Bureau of Economic Analysis. Economists polled by Refinitiv were expecting a 4% drop at an annualized rate.
Today’s reported fall, for the quarter ending March 31, compares to a 2.1% increase in the fourth quarter of 2020.
“It is backward looking, and especially backward looking this time. Everything changed in the middle of March,” says Dan North, senior economist at Euler Hermes. In the final two weeks of March, nearly 10.2 million Americans filed unemployment claims. In the three weeks since we’ve had another 16.3 million claims.
In the second quarter North told Fortune he projects a staggering 30% drop in GDP as the full impact of the coronavirus shutdowns are felt.
“The U.S. economy ran into a brick wall in March and some of the impact will be visible in first-quarter GDP… but [it’s] nothing compared to what’s ahead,” wrote Ryan Sweet, Head of Monetary Policy Research at Moody’s Analytics.


fortune--2020-04-29--Around the world, government aid is finally catching up to the gig economy

Diana Petra Kicherer had to stop teaching her usual 10 weekly classes in Geneva when yoga studios were closed during a nationwide shutdown to contain the coronavirus pandemic.
With no income coming in, she was relieved when the Swiss government offered assistance for self-employed workers like herself, who now make up roughly 10% of the labor force in the country. She filled out an online application in 10 minutes and the money arrived three weeks later.
“As independent people, we don’t have insurance,” Kicherer said. “I never thought I would be on state help.” The support is “absolutely amazing,” she said.
With governments bracing for economic contractions and joblessness not seen since the Great Depression, more of them are doling out part of their $8 trillion-plus stimulus to prop up the gig economy — supporting part-time and freelance workers who generally lack a safety net.
Countries like the U.K., U.S., France, Singapore and Australia are going well beyond the fiscal aid delivered during the 2008-09 financial crisis to target a part of the labor market that now makes up one-third of the global workforce, according to estimates from the International Labour Organization. The Netherlands, Germany, Austria and Japan have also allocated support for self-employed people.
It’s in part an acknowledgment of the change the labor market has undergone in the past decade as gig jobs surged with the emergence of digital platforms like Uber Technologies Inc. and Airbnb Inc. For governments, the programs are an additional cost pressure on stretched budgets, but ignoring this key part of the workforce would have dire consequences for peoples’ livelihoods and the wider economy.
Social Protection
“Considering the number of self-employed people in total employment, their economic contribution and their exposure—especially large numbers in informal sector—if they do not receive targeted support, the economic and social outcomes would certainly be more devastating,” said Dragan Radic, the head of the small and medium-sized enterprises unit at the Geneva-based ILO.
In low and middle-income economies, where informal markets tend to be bigger, self-employed people make up a sizable chunk of the labor force, according to the ILO.
But even in parts of the developed world, self employment has grown faster than overall employment, with countries already facing calls before the virus to update their social protection models. In France and the U.K., the share of the workforce who work for themselves, are members of producers’ co-operatives, or are unpaid family workers rose from 2007 to 2018, according to data from the Organisation for Economic Co-operation and Development.
Cash Payments
Governments worldwide are now funding the self-employed in ways they never have before. In a 2009 tally of OECD member states’ fiscal stimulus, only Iceland was mentioned as providing such benefits.
France recently set up a “solidarity fund” with contributions from the private sector to help self-employed and small business owners. The U.K. dedicated 9 billion pounds ($11 billion) to help self-employed workers in its fourth emergency package, while crisis-plagued Greece, which didn’t have a program a decade ago, unveiled financial assistance in response to Covid-19.
Australia is offering A$1,500 ($969) a fortnight for as much as six months for self-employed whose revenue is likely to drop by 30% or more. In Singapore, the government estimates that 100,000 self-employed persons will receive cash payments of S$3,000 ($2,114) each in May, July and October. And in Japan, where the self-employed make up about 8% of the working population, freelancers can claim as much as $9,300 from the government if they can show a minimum 50% loss of income in at least one month.
For all the billions of dollars thrown at this sector of the labor market, the rollouts have not been without their hiccups. Among the snags:
The U.S., with its patchwork of 50 state policies around distributing government aid, is dealing with mass delays and confusion, on top of charges that self-employed were crowded out of funding claimed by larger businesses
There’s a national, and international, argument about who qualifies as self-employed, with France ruling earlier this year that Uber drivers did not
In the U.K., a program to pay the self-employed the same proportion of their average annual earnings from the past three years is taking some time to get set up, with payments promised by early June
In Switzerland, some workers like taxi drivers were belatedly added to the program since they were initially seen as not legally forced to stop working—which hindered their eligibility
In Singapore, Paul Lew is running an online business selling wine and is setting up another website to sell medical products. He’s received S$600 as a cash handout that the government has paid all Singaporeans, and is considering whether and how he should apply for additional support.
He’s not worried about his own finances for now—he says he always keeps a “tight” control on what he spends—but believes the extra support is vital for the self-employed and small businesses in Singapore.
“Singapore depends a lot on this business,” he said. “A lot of them struggle— they struggle during normal times. And the package at least will help them over a couple of months.”
–With assistance from Lucy Meakin, Jason Scott, Yoolim Lee, Yuko Takeo, Jeannette Neumann and Sotiris Nikas


fortune--2020-04-29--Unemployment claims are taking some states weeks to process. Here’s what to know if you are stuck wa

Unemployment claims are taking some states weeks to process. Here’s what to know if you are stuck waiting for approval

Already 26.5 million initial unemployment insurance claims have been processed. But millions of claims are still waiting approval as states struggle with a massive backlog.
The backlog is so large that Kentucky Governor Andy Beshear says his state should finish reviewing unemployment insurance claims submitted in March this week—almost a full month after those applicants applied. “We are seeing jobless numbers like never before … but only a small percentage are getting processed right away,” says Dan White, head of fiscal policy research at Moody’s Analytics.
As unemployment insurance (UI) applicants wait for their claims to be approved, here’s what to keep in mind.
My unemployment claim is delayed. Will I get back-paid?
Many jobless Americans are waiting weeks to get approval for their unemployment benefits. But once they’re approved, their regular unemployment benefits as well as their additional $600 federal benefit (see below) are retroactive to when their initial claim is eligible—not when it is approved. That means some out-of-work Americans could be in line for some significant retroactive checks.
Can states run out of unemployment funds?
During the good economic times, states are suppose to build up their unemployment trust reserves. But before this massive wave of jobless claims, 22 states did not have the recommended reserves, according to a Department of Labor report published in February.
States who had the recommended reserves are eligible for interest-free federal government loans to cover unemployment benefits. States that didn’t have the recommended reserves, like New York and California, might need to make a request to the federal government to expand interest free borrowing and keep benefits flowing.
How do the additional weekly $600 unemployment benefits work?
The $2.2 trillion coronavirus stimulus bill passed in March provided an additional $600 weekly in unemployment insurance benefits to everyone who qualifies for their state’s program. The additional weekly $600 will only continue through the week of July 31.
Once a state approves an applicant’s unemployment claim, that person will automatically get the additional weekly federal money. However, some states like Hawaii have yet to start distributing the additional $600.
The stimulus bill also expanded who is eligible for unemployment benefits. That includes jobless part-timers, self-employed workers, freelancers and independent contractors.
Can my unemployment benefits be greater than my income?
The additional weekly $600 in unemployment benefits is for anyone that qualifies for UI regardless of their income-level. That works out to $15 per hour on a 40-hour workweek.
When considering that the money is on top of state benefits, most UI recipients who earned under $20 per hour at their jobs, will actually make more on unemployment.
What if my claim gets denied?
Chip Cruze had to shut down his softball training facility in Nashville when it was deemed non-essential in late March. After the CARES Act expanded unemployment benefits to self-employed folks like himself, he applied for UI on March 28.
The Tennessee UI system told him he was ‘monetarily ineligible’ but he’s since reapplied. A denial does not guarantee you won’t eventually get UI benefits. Cruze is preaching patience, and says he understand the state and federal systems are backlogged. The one thing he says he wishes there was more of from his state’s program? Communication during the process.
Our mission to help you navigate the new normal is fueled by subscribers. To enjoy unlimited access to our journalism, subscribe today.
More must-read finance coverage from Fortune:
—Why Goldman Sachs thinks Q1 GDP will be “worse than it looks”
—5 lessons for the coronavirus recovery, from an expert on success and failure in crisis
—What the law says about forcing employees back to the office
—This time, the banks were ready: How the Big Four prepared to survive the coronavirus
—Where investors can find income in a coronavirus-crushed market
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: Why the banks were ready for the financial impact of coronavirus
Subscribe to Fortune’s Bull Sheet for no-nonsense finance news and analysis daily.


fortune--2020-04-30--Could COVID-19 kill coal?

Could COVID-19 kill coal?

Buccaneers of the basin : The fall of fracking—and the future of oil

This is the web version of The Loop, Fortune’s weekly newsletter on the revolutions in sustainability. To get it delivered daily to your inbox, sign up here.
Good morning,
This is Katherine, filling in for Eamon from London.
This morning marks the release of the International Energy Agency’s annual energy report. The impact on global oil markets has been well documented, but one of the main takeaways of the report is the extent to which coronavirus pandemic is hitting coal.
The IEA forecasts that coal demand will plunge 8% on-year in 2020, the largest drop since the Second World War, and in the share of the global energy pie, coal’s loss is increasingly renewables’ gain. While that was already a trend before the pandemic sent the world into a near-global lockdown, it looks like that shift has accelerated.
The resulting drop in energy-related emissions this year is expected to be huge: the largest absolute decline on record, far surpassing the one in the financial crisis.
But while that drop can and should be celebrated as a silver lining for the planet (and our lungs), it comes with a laundry list of qualifiers.
The first is that, while the drop in coal has happened nearly everywhere as a result of a near-shutdown of industrial activity, the largest decline has been in China—which consumes half of the world’s coal, using it for the lion’s share of its electricity. The drop in coal consumption was very sharp at the start of the year, during the country’s widespread lockdowns. As the government attempts to fire the economy back up, coal could see a quick comeback.
The drop in coal, and the rise in low-carbon energy, has also received a somewhat ironic boost: mild winter weather across much of the world reduced the demand for heating; in the U.K., sunnier skies this spring have helped produce more solar energy, knocking out coal for a record stretch earlier this week.
The IEA, and many other global institutions, are warning that a recovery from the pandemic must be as “green” as possible. The benefits of cleaner air, suddenly apparent to the residents of polluted regions and cities, seem to help make that argument—as do the emerging links between vulnerability to COVID-19 and air pollution. The increasing affordability of solar power, in particular, has helped lay out how our energy sources could switch—quickly.
The COVID-19 pandemic may not kill coal. But it could certainly hasten its demise.
More below.
Katherine Dunn
katherine.dunn@fortune.com
@katherine_dunn
CARBON COPY
The bat cave
This story on China's 'bat woman' is advanced reading on the links between habitat loss and pandemics (you can also read Fortune's story on this, linked below.) Wuhan-based virologist Shi Zhengli has tracked down dozens of viruses linked to bats, but her research points towards the larger threat: when areas of dense biodiversity (from China to Brazil) clash with human activity, things emerge that we don't expect. Scientific American
Trash mountain
Yet another knock-on affect of COVID-19. Indonesia's trash pickers, who earn between $2 and $10 a day picking through vast landfills for reusable materials, are being hit by closed recycling facilities and social distancing rules. There, the risk is not of a lack of hand sanitizer and masks, one activist says—it's about going hungry. New York Times
"Eating the earth"
In the age of industrialized agriculture, our food systems—and our fertilizers—have dramatically changed. “It was like a closed loop until barely a hundred years ago," says one source quoted in this piece about the rise of phosphate strip mining. “Things died and decayed and were absorbed and grew and died and decayed. And then we kind of turned it into a straight line.” The Counter
Coal-free days
Sunny skies and plunging demand have helped the U.K. set another record for the number of days it's gone "coal free." Earlier this week, the country reached the 19th straight day without using coal for electricity, relying heavily on solar power instead. The decarbonization of the U.K. power systems last year helped the country hit its lowest emissions level since the late 1800s. Bloomberg
IN CASE YOU MISSED IT
IN CASE YOU MISSED IT
The Church of England is going up against ExxonMobil on Climate Change. Can It Win? by Katherine Dunn
Forget 'wet markets' and bats: For scientists, failing environmental policies have created a boom time for outbreaks by Ian Mount, Katherine Dunn, and Bernhard Warner
How Eileen Fisher became a model of sustainability in the fashion industry Leadership Next
'Unreal': Oil prices go negative for the first time in history by Katherine Dunn
Bill Gates explains how to beat the coronavirus pandemic by Clifton Leaf
Saving a city: How Seattle's corporate giants banded together to flatten the curve by Erika Fry
CLOSING NUMBER
2.26 million
That's the number of tourists that visit Australia's Great Barrier Reef every year (well . . . maybe not this year.) That tourism contributes more than $6.4 billion to the Australian economy, and supports 64,000 jobs—more than the country's main telecoms carrier. But despite tourists getting the blame for the vast damage to one of the world's great natural wonders, this story from Afar points out that it's not the tourists themselves causing the damage: it's their carbon footprint. (Hint: think about how far away Australia is, from almost anywhere else.)