Shake Shack Is Returning Its $10M Government LoanNewser — Kate Seamons
Last week brought the news that the $349 billion Paycheck Protection Program set up to help small businesses amidst the coronavirus pandemic had already run dry.
Now its balance apparently sits at $10 million, thanks to ... Shake Shack. The burger chain late Sunday announced that it would "immediately return" the $10 million the government gave it as part of the program.
CEO Randy Garutti and chairman Danny Meyer explained in an open letter that the company can make do without the money because it is "fortunate to now have access to capital that others do not." CNN reports a Friday filing from the NYSE-listed chain stated that it could raise as much as $75 million by selling shares, and the AP reports it secured extra funding late last week through an "equity transaction."
Shake Shack has nearly 8,000 employees and has furloughed hundreds, necessitating the aid, per the letter.
Garutti and Meyer explained the company was eligible for a PPP loan because no one location had more than 500 employees (45 is the average), qualifying it as a small business.
"We cheered the news" that all restaurants up to that size would be eligible, "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." But "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 and Meyer say that "until every restaurant that needs it has had the same opportunity to receive assistance, we’re returning ours." (The White House and Congress are said to be close to a second aid package that would replenish the program to the tune of $450 billion.)
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This article originally appeared on Newser: Shake Shack Is Returning Its $10M Government Loan