Shake Shack Returns $10 Million PPP Loan Amid Criticism Of Restaurant Chains Receiving Stimulus Funds

TOPLINE

Burger chain Shake Shack will give back its $10 million small business loan from the federal government, the company’s senior leadership said Sunday, following criticism that large restaurant chains were able to obtain funds before the loan program had been depleted—seemingly shutting out much smaller restaurants.

KEY FACTS

Crucial quote

“Until every restaurant that needs it has had the same opportunity to receive assistance, we’re returning ours,” wrote Garutti and Meyer on LinkedIn.

Big number

71. That’s how many publicly-traded companies received PPP funds before the money ran out, according to Securities & Exchange Commission filings.

What to watch for

A second phase of small business assistance. Treasury Secretary Steve Mnuchin said Sunday that “we are very close to a deal” on a small business package that would include additional aid. 

Key background

The restaurant industry has been particularly hard-hit by the coronavirus pandemic. Restaurants typically operate with slim margins, according to Eater, and rely on the now-impossible public gatherings to generate much of their revenue. According to Bloomberg, over a dozen restaurants with revenues topping $100 million were able to apply for PPP loans. It took about 13 days for PPP funds to be exhausted.

Further reading

Shake Shack Is Returning Its PPP Loan. Here’s Why (LinkedIn)

Shake Shack Returning $10 Million Government Loan Meant For Small Businesses (NBC News)

Shake Shack Gets $10M Federal Loan For Small Businesses Affected by COVID-19 (Eater)

Seventy-One Publicly Traded Companies Got Paycheck Protection Funding Before Money Ran Out (Forbes)

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