Photo composite by Garret Van Wie ’22 | Small Businesses are struggling to stay in business during the COVID-19 lockdown
By Garret Van Wie’22
Shake Shack is returning a 10 million dollar federal loan from the Paycheck Protection Program (PPP), designed to help small small businesses with financial difficulties. In a statement during the signing of the bill that created the PPP, Trump called the bill, “historic” and said that it “will provide vital financial relief to American workers and families.”
Shake Shack was not the only big business taking the money meant for small businesses. Potbelly applied for, and got, the maximum loan of 10 million dollars as well. Both of these restaurants are part of a public business chain and in theory should not qualify for the loan as only small, private businesses with a small number of employees. However a loophole allowed these public businesses to apply for a loan per location, meaning businesses not meant to be included in the program were able to slip in.
Shake Shack has thousands of employees in its many locations in the U.S and makes millions of dollars per year. The Chief Executive Randy Garutti and Danny Meyer, the founder of Shake Shack released a letter posted to LinkedIn in response to criticism for applying for the Paycheck Protection Program. Shake Shack described how it recognizes how much smaller businesses need assistance and explained that the PPP was “extremely confusing,” urging Congress to “ensure that all restaurants no matter their size have equal ability to get back on their feet and hire back their teams.”
The Paycheck Protection Program ran out of money, in part due to the millions of dollars sent to large companies. As a result, many independent businesses have been unable to get the money they need because large businesses that are still open, unlike some of the smaller counterparts applying, are getting millions of dollars in loans.”
A watchdog group called Accountable U.S. has called out these big businesses and the presidential administrations failure to properly allocate loans. Kyle Herrig, the president of Accountable U.S. said, “Whether it’s mismanagement or malpractice, the Trump administration’s failure to allocate funds properly means thousands of small businesses won’t receive the funding necessary to support their employees. Meanwhile, a bunch of publicly traded companies worth hundreds of millions got a cash infusion and are sitting pretty.”
Two local businesses, both run by Brophy families, applied for and didn’t receive loans from the Paycheck Protection Program: Zookz: Round Toasted Sandwiches and Samurai Comics.
Currently a secondary measure to put more funds into the PPP is being finalized for those small businesses not helped in the first round.