Business

Potbelly to repay $ 10 million PPP loan after outrage

A sign alerts customers to the Potbelly Sandwich Shop that it is open for pickup and takeout only due to the coronavirus outbreak in Washington, DC, United States, Tuesday, March 17, 2020. Photographer: Andrew Harrer / Bloomberg via Getty Images

Andrew Harrer | Bloomberg | Getty Images

Potbelly said on Saturday that he would pay back his $ 10 million payroll loan program for small businesses, making it the last notable name to return the funds.

The sandwich chain is following other large public companies like Ruth’s Chris Steakhouse and Shake Shack to give back government funds to help companies survive the coronavirus pandemic. The total allocation of $ 350 billion dried up earlier this month, causing outrage at the large-cap SOEs that received the aid.

According to a study by Morgan Stanley, the government has allocated at least $ 243.4 million in PPP loans to publicly traded companies. However, the program was primarily designed to help dad stores continue to pay their employees. Potbelly, which has received the maximum loan amount, has a market capitalization of $ 71.2 million.

“We were surprised and disappointed when the fund was quickly depleted, leaving many people without help,” said Potbelly in A declarationSaturday. “We are repaying the PPP loan after further clarification from the Treasury Department.”

Potbelly said its sales dropped dramatically when the virus struck, and that it was forced to lay off employees, close sites, and cut wages at all levels considerably. To support store workers, the company said it had applied for the small business loan. He is currently studying alternative methods of obtaining funds.

Ruth’s Hospitality Group, which owns Ruth’s Chris Steakhouse, repaid the $ 20 million it received through the PPP by making a request through two different subsidiaries. He is now evaluating other options for obtaining future funds.

Shake Shack also repaid her $ 10 million PPP loan, which she applied for after closing about half of its 120 locations worldwide. The chain was forced to lay off or lay off more than 1,000 employees as the coronavirus pandemic closed in the United States.

Shake Shack CEO Randy Garutti and founder Danny Meyer said a blog post that the funds returned could be returned to independent restaurants “that need it the most (and have received no help”).

Other large state-owned enterprises have refused to repay the loans, despite new guidelines released Thursday by the Treasury Department and the Small Business Association, which clarify which companies are eligible for the loans.

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