Shake Shack to repay $ 10 million small business loan

0
69


The decision comes shortly after Shake Shack was identified in recent media reports as being part of many large companies with revenues of more than $ 100 million who obtained loans from your paycheck protection program. , which peaked last week and are no longer accepting complaints. The $ 350 billion loan program, a fundamental part of these massive $ 2.2 trillion stimulus packages every month, is designed to encourage small businesses to keep people employed with loans that are forgivable if employees are kept on the payroll, based on this Small Business Administration.

But as CNN reported this weekend, dozens of small businesses have had their loan requests turned down while larger companies such as restaurant chains, hoteliers and other publicly traded companies have received millions of dollars.

In Sunday’s letter, Meyer, the creator of Shake Shack, and Garutti, the CEO, explained that the series originally requested federal assistance because it qualified under a stipulation that the loans could be paid. at a restaurant with no more than 500 employees. Although Shake Shack has 189 locations, each restaurant employs only about 45 people, the letter says.

“The‘ PPP ’didn’t come with a user manual and it was extremely confusing,” wrote Meyer and Garutti. “The best chance to keep our teams at work, out of the unemployment line and to rehire our workers on leave and laid off, is to hire now and hopefully things can be explained in time.”

The hamburger chain was not the only major restaurant company to benefit from the program, CNN reported. According to CNN, Potbelly Sandwich Shop, grills Ruth’s Chris and Kura Sushi USA Inc., one of the largest sushi chains in the country, have received large loans.

Meyer and Garutti said Sunday that they did not know the federal program could be swamped so quickly and acknowledged the outcry from independent companies that were unable to obtain loans. The decision to reverse the $ 10 million loan was made instantly after Shake Shack secured separate funding last Friday “necessary to ensure our long-term stability,” the letter said.

The two leaders then urged Congress to ensure that the program is adequately funded, writing: “It is inexcusable to leave restaurants outside because no one told them to go online when the funds would dry up “

“If this health disaster and the associated economic shock has taught us anything, it is that we are all in the same boat,” wrote Meyer and Garutti. “Their employees are thirsty for the moment when we can safely resume our activities and bring our guests back to the dining table. With adequate funding and a few crucial tweaks, the P3 application can deliver the economic spark that the entire industry should take back. “

LEAVE A REPLY

Please enter your comment!
Please enter your name here