Shake Shack Will Return $10 Million Stimulus Loan

On Monday, fast-casual burger chain Shake Shack announced it would return a $10 million loan it received from the “Paycheck Protection Program,” the Small Business Administration’s emergency relief effort, which lapsed last week before many small businesses were able to apply for their share of the program’s $350 billion in funding.

In a post on LinkedIn, Shake Shack CEO Randy Garutti and Chairman Danny Meyer wrote that the brand secured enough additional funding last week to return it’s entire PPP loan “so that those restaurants who need it most can get it now.”

The decision comes after widespread uproar over the PPP’s funding and rollout, which many said favored larger businesses. On Thursday, President Trump announced that, after just two weeks, the program had already exhausted its funding, leaving many businesses that did not have the resources or legal support to maneuver the application process out of luck.

In the same post, Garutti and Meyer urged Congress “to ensure that all restaurants no matter their size have equal ability to get back on their feet and hire back their teams.” He recommended the following steps.

• Fund it adequately. It’s inexcusable to leave restaurants out because no one told them to get in line by the time the funding dried up. 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. 

 

• Assign to each applying restaurant a local bank that will be responsible for executing the loan assuming the restaurant has satisfied eligibility requirements. Too many restaurants have been left out of the program simply because they lacked a pre-existing banking or loan relationship.

 

• Eliminate the arbitrary June forgiveness date for PPP loans. This virus has moved in waves with a different timeline in different parts of our country. Instead, make all PPP loans forgivable if an adequate number of employees are rehired by a minimum 6 months following the date that a restaurant’s state (or city) has permitted a full reopening to the public.

Read the full post on LinkedIn

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