Chief among the features of the bill that affect the dietary supplement industry are measures aimed at increasing the ability of the Small Business Administration to provide loans to sustain firms impacted by the crisis. The United Natural Products Alliance has done a deep dive into the bill’s provisions and provided a snapshot of key features for members.
Many supplement manufacturers are reporting being busier than ever. But much of that activity relates to the production and sale of products with some immunity tie in. Many companies are reporting out of stocks and some manufacturers have added extra shifts on the shop floor to keep up. In some cases, such as in New York City, retailers reportedly have started to limit the sale of certain SKUs such as vitamin C products, to forestall hoarding.
But other parts of the industry will surely start to feel a significant pinch. Sales of weight management supplements, beauty from within, sports nutrition products and perhaps joint care lines may start to fall into the discretionary purchases category.
The new bill provides $1,200 in immediate relief payments to every taxpayer, which may help. But the 3.2 million jobless claims that were filed today were the highest ever recorded, so much of that money will surely go pressing necessities such as rent and food.
UNPA: Small business loan program beefed up
According to the UNPA analysis, the relief measure increases the maximum SBA loan to $10 million and broadens what those loans can be used for. Such loans can now be used to cover payroll costs such “paid sick or medial leave, employee salaries, mortgage payments, and any other debt obligations.”
The package also loosens eligibility requirements. Previously businesses had to demonstrate an ability to repay the loans, something that is impossible to do during an enforced shutdown. Now the requirement is to prove that the firm was a going concern as of March 1, 2020. The bill also includes a provision that would defer loan payments for up to one year, and directs the SBA to issue guidance on the deferment process within 30 days.
Among the direct appropriations noted by UNPA relevant to the dietary supplement industry are:
- $299.4 billion for loan guarantees and loan subsidies,
- $300 million for salaries and expenses,
- $240 million for small business development centers and women’s business centers for technical assistance for businesses,
- $25 million for resource partner associations to provide online information and training,
- $10 million for minority business development centers for technical assistance for businesses, and
- $25 million for the Office of Inspector General.
NPA: Extirpation of foot traffic sure to hurt supplement industry
Dan Fabricant, president and CEO of the Natural Products Alliance, said even with the burgeoning sales of the immune health products, the coronavirus-related dislocations are sure to hurt, meaning many supplement companies will have need of some of the supports offered by the stimulus bill.
“There is money in there for small business, which is what we’re most excited about,” Fabricant told NutraIngredients-USA. “In general, foot traffic is down at retail outlets with the shelter in place orders. And are those fewer customers going to try something new, or pick up a workout product when all the gyms are closed?”
The bill new goes to the US House, where further revisions are likely, especially around worker protection provisions. NutraIngredients-USA will be posting more updates as they become available.