What was Shake Shack thinking?
It was among at least 75 publicly traded companies – i.e. big companies – that received up to $10 million loans from the Paycheck Protection Program (PPP). The intent of the $349 billion program was to help keep small businesses afloat.
But there was a loophole: A company was eligible if it employed fewer than 500 employees at any one location. The average Shake Shack outlet employs 45. Shake Shack, with nearly 8,000 total employees, got a $10 million federal loan.
Some other large restaurant and hotel chains, energy companies, and auto dealers found the same loophole.
In 13 days, the PPP was drained, leaving nothing for thousands of mom-and-pop businesses that also applied. And there may be another injustice. Banks, which administer the program, got larger fees on bigger loans. That’s why four actual small businesses in California, including a yogurt shop and optometrist, filed a lawsuit Monday against Wells Fargo, Bank of America, JPMorgan Chase, and U.S. Bancorp. They argue the banks prioritized bigger clients over them.
Congress is working on a bill to replenish the PPP funds. And Shake Shack? So far, it’s the only company that’s done the responsible thing. The company returned the $10 million, saying it had “access to capital that others do not.”
I don’t know about you, but I like my burgers served with integrity.
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