Many small businesses in the US have been receiving loans from the government through the Paycheck Protection Program to stay afloat during the COVID-19 pandemic. However, the program quickly ran out of funds despite the ongoing struggles of small businesses. There has been criticism as some chain restaurants and large businesses, possibly not fitting the “small business” category, also secured loans.
One such chain, Shake Shack, decided to return the $10 million loan it received through the PPP. The CEO, Randy Garutti, and chairman, Danny Meyer, explained in a letter on LinkedIn that they have alternative financial resources not available to smaller businesses and believe others are in greater need.
According to Garutti and Meyer, Shake Shack is managing the current challenges along with other American restaurants. Despite the potential benefit to their employees from the loan, they acknowledged their privileged position in securing additional capital and opted to return the loan until all deserving businesses have equitable access to aid.
Furthermore, they proposed improvements to the PPP, such as partnering with local banks for screening eligibility, extending the loan forgiveness deadline past June, and enhancing overall funding procedures.
