Shake Shack Returns $ 10 Million P3 Loan To Government

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The hamburger chain obtained the loan under the Paycheck Protection Program (PPP). The $ 349 billion stimulus package, overseen by the Small Business Administration (SBA), ran out of funding last week.

In the past few days, there has been a growing backlash on the distribution of funds. Several media outlets revealed how large chunks of the package were taken up by restaurant chains, hoteliers and publicly traded companies, rather than small local businesses.

Shake Shack CEO Randy Garutti and President Danny Meyer announced their decision to return the funding in an open letter Monday, saying the NYSE-listed company no longer needs the money because it ” the chance to now have access to capital that others do not have. . The company said on Friday that it expects to be able to raise up to $ 75 million from investors by selling stocks.

The leaders also shared their frustrations with the PPP, arguing that many restaurants had been unfairly left out because the program “came without a user manual and was extremely confusing.”

Garutti and Meyer are now asking the SBA to increase funding for the program. They also want the US agency to assign a local bank to work with each claimant, facilitate the process and make the forgiveness policy more flexible.

Union Square Hospitality Group, another The food and beverage sector, independently managed by Meyer, has received “part” of the loans it has applied for, executives said. They said all of these restaurants had closed last month and the company was forced to fire more than 2,000 workers. They did not say whether the company would also return funds.

An agreement for additional PPP funding could be announced soon.

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President Donald Trump said at a briefing to the coronavirus task force on Sunday that “we are continuing to negotiate with the Democrats to take care of our big workers and small businesses across the country.”

“I think we are nearing a deal. It could happen. It could happen, ”said Trump. “A lot of good work has been done and we may have an answer tomorrow and we will see what exactly is going on. “

– Veronica Stracqualursi, Manu Raju and Alicia Wallace of CNN contributed to this report.

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