Shake Shack announced on Sunday it’s returning the $10 million the company has received through federal loans.
The Paycheck Protection Program (PPP) is designed to keep people employed and paid.
“The loan program set aside $349 billion in the stimulus law called the CARES Act to help small businesses keep their workers on the payroll,” according to NBC News. “Less than two weeks after it started, the program has already run out of money.”
Shake Shack has faced operating losses of over $1.5 million each week amid the COVID-19 lockdown. The company had applied for support but has reversed its decision.
Big restaurant chains like Shake Shack have received some criticism for applying and taking the loan, while smaller and locally owned stores have been denied such loans.
“We now know that the first phase of the PPP was underfunded, and many who need it most, haven’t gotten any assistance. Shake Shack was fortunate last Friday to be able to access the additional capital we needed to ensure our long-term stability through an equity transaction in the public markets,” Shake Shack CEO Danny Meyer wrote in a LinkedIn post.
“We’re thankful for that and we’ve decided to immediately return the entire $10 million PPP loan we received last week to the SBA so that those restaurants who need it most can get it now.”
Shake Shack shares traded around $43.50 on Monday. The stock has a 52-week range between $105.84 and $30.01.
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