Coronavirus: Shake Shack Returns $10M Loan To Federal Government
LOS ANGELES (CBSLA) – Nationwide burger chain Shake Shack announced Monday that it is returning a $10 million loan it received from the federal government through the latest stimulus package designed to help businesses hurt by the coronavirus pandemic.
Founder and CEO Randy Garutti wrote in a letter that his company made the decision to return the $10 million it received through the Paycheck Protection Program (PPP) after it was able to secure separate funding.
"Shake Shack was fortunate last Friday to be able to access the additional capital we needed to ensure our long term stability through an equity transaction in the public markets," Garutti wrote. "We're thankful for that and we've decided to immediately return the entire $10 million PPP loan we received last week to the SBA so that those restaurants who need it most can get it now."
Shake Shack's decision to return the money comes as thousands of independent businesses across Southern California and the nation have been unable to obtain loans through the $349 billion PPP program because the money was quickly dried up.
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On Friday, the federal government came under severe criticism after it was revealed that Ruth's Chris Steakhouse chain and the company that owns Potbelly Sandwich Shop chain received a combined $30 million in PPP.
"Late last week, when it was announced that funding for the PPP had been exhausted, businesses across the country were understandably up in arms," Garutti wrote. "If this act were written for small businesses, how is it possible that so many independent restaurants whose employees needed just as much help were unable to receive funding? We now know that the first phase of the PPP was underfunded, and many who need it most, haven't gotten any assistance."
Shake Shack has 189 restaurants nationwide and employs about 8,000 people.
"We urge Congress to ensure that all restaurants no matter their size have equal ability to get back on their feet and hire back their teams," Garutti wrote.
Legislators are currently working on a second aid package for small businesses that would provide another $450 billion in loans.
