Shake Shack (SHAK) is returning a $10 million loan it received from the US government under an emergency program that was touted as a way to help small businesses pay workers and keep their operations running during the coronavirus crisis.
The burger chain was awarded the loan as part of the Paycheck Protection Program (PPP). The $349 billion stimulus package, overseen by the Small Business Administration (SBA), ran out of funding last week.
Over the last few days, there has been a growing backlash over the distribution of the funds. Several media outlets have revealed how large chunks of the package were taken up by chain restaurants, hoteliers and publicly traded corporations, rather than small, local businesses.
Shake Shack CEO Randy Garutti and chairman Danny Meyer revealed their decision to give back the funding in an open letter Monday, saying that the NYSE-listed company no longer needs the money because they are “fortunate to now have access to capital that others do not.” The company said in a filing Friday that it expects to be able to raise up to $75 million from investors by selling shares.
The executives also shared their frustrations with the PPP, arguing that many restaurants had been left out unfairly because the program “came with no user manual and it was extremely confusing.”
Source: Shake Shack returns $10 million emergency loan to the US government
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