UIG Platinum
The popular burger chain #ShakeShack said it will return the $10 million loan it received from the federal government’s coronavirus aid program, a small business rescue effort that ran out of funding last week.
Shake Shack received funds from the Small Business Administration’s Paycheck Protection Program and plans to return after being able to raise additional capital from stock investors.
Shake Shack applied for the forgivable loan at a time when it wasn’t clear that the program’s funds could be exhausted before all applicants were approved, Chief Executive Randy Garutti said in a statement with restaurateur Danny Meyer, whose restaurant group founded Shake Shack.
Small businesses have complained they were unable to apply for loans or receive the funds while larger businesses quickly received assistance. Even though loans were generally capped at $10 million, Ruth’s Chris Steak House chain was able to qualify for $20 million under a provision that allowed it to seek loans for each to subsidiaries. The loans were intended for businesses with fewer than 500 employees, but language in the $2 trillion stimulus bill allowed restaurants and hotel chains to participate regardless of how many total people they employ. Shake Shack, which has 189 restaurants, said it was employed an average of 45 people per location.
“Shake Shack was fortunate last Friday to be able to access the additional capital we needed to ensure our long-term stability through the public markets”. Their shared closed Friday at $43.50, giving the company a market value of roughly $1.6 billion. The shares were trading above $70 in February.
