The Paycheck Protection Program was included as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act and was touted as a relief fund aimed at bailing out small businesses and nonprofits and helping them pay their workers during the coronavirus pandemic. But since the $349 billion stimulus package overseen by the Small Business Administration ran out of money last week, it has been criticized for allowing large shares of the fund to go to chain restaurants and hotels. Now, one restaurant chain is giving back the money it received.
CNN reports that on Friday, Shake Shack CEO Randy Garutti and chairman Danny Meyer revealed in an open letter that the company will be returning a $10 million loan that they were approved for because they are “fortunate to now have access to capital that others do not.”
“Until every restaurant that needs it has had the same opportunity to receive assistance, we’re returning ours.” the letter reads.
Garutti told CNN that the decision to return the funds was made after the company discovered that the small businesses that the loan was purported to be aimed at helping, were not getting access to it.
“That doesn’t seem right to us,” he said. “As we watched this opportunity play out over the weeks, it was very clear that the program was underfunded and wasn’t set up for everyone to win.”
When asked why the company applied for the loan in the first place despite having other resources, Garutti said that it was about “taking care” of its workforce.
“Our team members have equal value to any other team member in the world,” he said.
“By returning our $10 million, that $10 million can go back into the pot and go to the people that deserve it. We hope it can go inspire the next round,” he continued.
In that open letter, Garutti and Meyer acknowledge President Trump’s announcement that his administration is working on getting the PPP around $300 billion in additional funding. They urged Congress to ensure that those funds are made available to the smaller restaurants that need them.
“It’s inexcusable to leave restaurants out because no one told them to get in line by the time the funding dried up,” they wrote. “That unfairly pits restaurants against restaurants. This industry rises and falls together. And if there is a concern that once again the government will have not allocated adequate funding, then send business to the front of the PPP line which has more limited access to outside funding.”
The letter also asks that each restaurant that applies be assigned a local bank to execute the loans and that the “arbitrary June forgiveness date” for PPP loans be eliminated pointing to the fact that “This virus has moved in waves with a different timeline in different parts of our country.”