Shake Shack returns $10m loan to fed gov and urges US leaders to reorganize their loan program
The federal government has been working to assist businesses impacted by the COVID-19 pandemic, but one company decided to return the check provided by the federal government.
CNN reports that the popular casual-dining restaurant chain, Shake Shack, is refusing to accept monetary assistance from the government at this time.
The company returned a $10 million loan it received from the government under the Paycheck Protection Program, or PPP, which is an emergency program meant to help small businesses pay workers and keep their operations running during the coronavirus crisis.
But when the $349 billion stimulus package, overseen by the Small Business Administration (SBA), ran out of funding last week and several media outlets revealed that large chunks of the package were taken up by chain restaurants, hoteliers and publicly traded corporations instead of small businesses, Shake Shack's leaders felt it was only right to give the money back.
The company's CEO, Randy Garutti and its chairman, Danny Meyer explained their decision in an open letter Monday, saying that the NYSE-listed company no longer needs the money because they are "fortunate to now have access to capital that others do not."
The company said in a filing Friday that it expects to be able to raise up to $75 million from investors by selling shares.
Garutti and Meyer are now calling on the SBA to increase funding to the program. They also want the US agency to assign a local bank to work with each applicant and ease the process, and to make the forgiveness policy more flexible.
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