Why Did Shake Shack Return $10 Million Stimulus Loan From The Government?
Popular burger restaurant Shake Shack has returned a $10 million loan from the government during the coronavirus pandemic. The company’s reason for giving the money back highlights the importance of supporting small businesses at this uncertain time.
According to NBC News, the Paycheck Protection Program, or PPP, set aside $349 billion to help small businesses. The program has run out of money after two weeks, and several large companies have received loans.
Why Did Shake Shack Receive A $10 Million Loan?
Over a dozen companies with a revenue of over $100 million reportedly received loans from the PPP. That includes Shake Shack, as well as Potbelly Sandwich Shop and Ruth’s Chris Steak House.
However, Shake Shack chose to return the loan after the PPP ran out of money, in order to help businesses that really need it. The company’s executives explained in a LinkedIn post that the PPP “came with no user manual and it was extremely confusing.”
The company had applied for the loan, as the program was apparently eligible to any restaurant with fewer than 500 employees per location. “There was no fine print, anywhere, that suggested: ‘Apply now, or we will run out of money by the time you finally get in line,'” the post explains.
Shake Shack Returns Loan From The Government
Founder Danny Meyer and CEO Randy Garutti wrote on LinkedIn that Shake Shack faces to lose over $1.5 million each week due to drops in business during the pandemic. However, they have chosen to return the loan to prevent smaller businesses from missing out on much-needed funds.
“Our people would benefit from a $10 million PPP loan, but we’re fortunate to now have access to capital that others do not,” the company shared. “Until every restaurant that needs it has had the same opportunity to receive assistance, we’re returning ours.”
Congress is reportedly close to a deal about additional funding for the PPP, which was part of the $2.2 trillion CARES Act stimulus package signed into law last month.