Publicly traded burger chain Shake Shack announced Monday that it would return the $10 million it received through the congressionally approved (and now depleted) Paycheck Protection Program, after being criticized for securing the funds intended to help struggling small businesses survive the coronavirus shutdown.
What are the details?
NBC News reported that Shake Shack was one of "more than a dozen companies with annual revenues in the hundreds of millions that are reported to have received money" from the $349 billion loan program passed as part of the $2 trillion coronavirus relief package, the CARES Act.
But PPP ran out of money last week after Democrats refused to replenish it unless additional funds were added for hospitals and state and local governments, leaving desperate small businesses unable to find relief.
Critics and even Shake Shack executives themselves have questioned why such a large corporation qualified under the PPP loan program in the first place, placing blame on Congress for rushing through legislation that had been sold as lifeline for mom-and-pop shops.
In announcing that Shake Shack would return the funds it received from the Small Business Association, CEO Randy Garutti explained:
While the program was touted as relief for small businesses, we also learned it stipulated that any restaurant business — including restaurant chains — with no more than 500 employees per location would be eligible. We cheered the news, as it signaled that Congress had gotten the message that as both as an employer, and for the indispensable role we play in communities, restaurants needed to survive. There was no fine print, anywhere, that suggested: 'Apply now, or we will run out of money by the time you finally get in line.'
Garutti went on to say that his firm was able to secure additional private capital last week, adding, "We're thankful for that and we've decided to immediately return the entire $10 million PPP loan we received last week to the SBA so that those restaurants who need it most can get it now."
Following Shake Shack's announcement, billionaire Mark Cuban slammed the company on CNBC's "Fast Money," saying, "Shake Shack didn't give the money back because they didn't want the money. They saw what the public outcry was."
Former U.S. Ambassador to the U.N. Nikki Haley offered the firm praise for returning the funds, saying on Twitter, "Thank you to Shake Shack for remembering we are all in this together."
Thank you to @shakeshack for remembering we are all in this together. Shake Shack returned the money it took from Pâ�¦ https://t.co/stwU8x2Scu— Nikki Haley (@Nikki Haley) 1587403532.0