Burger chain Shake Shack returns $10 million emergency government loan intended for small businesses

KSBW ^ | Apr 20, 2020 | Michelle Toh

[nickcarraway]

Shake Shack is returning a $10 million loan it received from the U.S. 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.

[nickcarraway]

Are they doing this because they want to lay people off? If a company takes this money, aren't they barred from layoffs? I'd be worried if I worked there.

[GnuThere]

I thought it was the bad PR.

[Carriage Hill]

“...how large chunks of the package were taken up by chain restaurants, hoteliers and publicly traded corporations, rather than small, local businesses.”

Did anyone really expect anything else, given the slimy bureaucrats handing-out the “stimulus monies”?

[frank ballenger]

Bad PR....

It was.

Also maybe people figured out it wasn’t “small business” it was just small portion size and value.

[IllumiNaughtyByNature]

I doubt it, but the truth will be known soon. If they don’t lay people off, the can be forgiven.

[abigkahuna]

When the PPP was passed, I attempted to sign up for our very small business. By the time I found out I needed an online account with my bank, the money was gone? Was it because a zillion little mom and pop businesses like our was gobbling up the hundreds of billions $25K at a time, or was it because chains like this one bit off huge chunks of cash?

[McGavin999]

There is relief coming for hotels and chains,they shouldn’t be taking it from the guy who has 10 employees. They also have to look into Harvard taking a loan out. Now that is disgusting.

[Ann Archy]

Harvard getting MILLIONS is BEYOND DISGUSTING!

[\/\/ayne]

I think fast food is doing ok anyway.

[McGavin999]

Actually, someone should go to jail over that one.

[butlerweave]

I bet Nancy’s Pizza place ,Winery ,Hotel ,etc etc will never return the money ,LOL

[Zhang Fei]

Borrowing money that you have to pay back in the face of zero revenues is not a good short-term business strategy, let alone a good long-term one. They should furlough the entire workforce in restaurants that are either not open or losing money.

[unixfox]

They aren’t considered a small business. They are publicly traded.

[P.O.E.]

Now I’m wondering about McDonald’s franchisees.

[Alberta's Child]

I think part of the dilemma here is that some hotel and restaurant chains are actually operating under a franchise model, which means that each individual location can be a separate company with one owner and a small number of employees.

I'm pretty sure Shake Shack is NOT a franchise, though.

[ragamuffin]

Really ticked off over this waste of money, not just for many business, but individuals like myself. I gave it some thought - and am giving the amount I receive to a very poor local woman on SS. Combined with “her” money, she might just have enough for a month or so that she will not have to choose between paying her rent or eating.

[McGavin999]

Neither is Harvard

[MinorityRepublican]

When restaurants return. They should plan on 30% capacity.

[Alberta's Child]

I think the whole approach here is to cast these as loans up front, but “forgive” them in the future as long as the employer keeps the staff on the payroll while zero revenues are being generated.

[Jeff Chandler]

Where’s my free money?