Potbelly to repay $ 10 million PPP loan after outrage

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Potbelly said on Saturday that he would pay back his $ 10 million payroll loan program for small businesses, making it the last notable name to return the funds.

The chain of sandwich shops is following other big public companies like Ruth’s Chris Steakhouse and Shake Shack to give back government funds to help companies survive the coronavirus pandemic. The total allocation of $ 350 billion dried up earlier this month, causing outrage at the large-cap public companies that received the aid.

According to a study by Morgan Stanley, the government has allocated at least $ 243.4 million in PPP loans to publicly traded companies. However, the program was primarily designed to help dad stores continue to pay their employees. Potbelly, which has received the maximum loan amount, has a market capitalization of $ 71.2 million.

“We were surprised and disappointed when the fund was quickly depleted, leaving many people without help,” said Potbelly in a statement on Saturday. “We are repaying the PPP loan after further clarification from the Treasury Department. “

Potbelly said her sales fell dramatically when the virus hit, and she was forced to lay off workers, shut down sites and cut wages at all levels considerably. In order to support store workers, the company said it had applied for the small business loan. He is currently studying alternative methods of obtaining funds.

Ruth’s Hospitality Group, which owns Ruth’s Chris Steakhouse, repaid the $ 20 million it received through the PPP by making a request through two different subsidiaries. He is now evaluating other options for obtaining future funds.

Shake Shack also repaid her $ 10 million PPP loan, which she applied for after closing approximately half of its 120 locations worldwide. The chain was forced to lay off or lay off more than 1,000 employees as the coronavirus pandemic closed in the United States.

Shake Shack CEO Randy Garutti and founder Danny Meyer said in a blog post that the funds returned could be donated to independent restaurants “who need it most (and) have received no help.”

Other large state-owned enterprises have refused to repay loans, despite new guidelines released Thursday by the Treasury and the Small Business Association, which clarify which companies are eligible for loans.

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