Shake Shack repays $ 10 million government loan

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The original Shake Shack.
Photo: Andrew Burton / Getty Images

Last week, it was reported that Shake Shack was one of several large chains that obtained loans from the CARES Act, a law supposed to help small businesses. For the paycheck protection program, the definition of small business was broad enough – any restaurant with 500 or fewer employees – that chains like Shake Shack and Ruth’s Chris were eligible. But the $ 350 billion in stimulus bill, intended to help workers keep their jobs, quickly dried up, with many business owners saying they were unable to get the money. . After receiving criticism for applying, Shake Shack founder Danny Meyer and CEO Randy Garutti announced that they would immediately repay the $ 10 million in P3s they received.

As reported by NBC News, Meyer and Garutti released a joint statement on LinkedIn. They write there that “the” PPP “came without a user manual and it was extremely confusing” and that they thought that “the best chance to keep our teams at work, out of the unemployment line … would be to apply now”. They also point out that “few, if any, restaurants in America employ more than 500 people per location,” demonstrating just how broad the legal definition of small business is.

What they didn’t know, they write, was that the money would run out so quickly. People worried the bailout might not be enough for small businesses in March, when Slate wrote that “since these loans are first come, first served, there is a real chance the money will run out before anyone else. need a lifeline get one.

The statement also notes that Shake Shack was able to raise additional capital through a capital transaction, which it said on Friday was worth $ 150 million. An additional $ 310 billion PPP is “on the verge of approval,” as Garutti and Meyer write, but they note that when it comes to the distribution of funds “this time we need to do better.”

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