Shake Shack said Monday it will return the small business loan it got from the U.S. government, making it the first major company to hand back money provided to help businesses ride out the healthcare crisis.
Fred Katayama reports.
Shake Shack will give back the $10 million small business rescue loan it got from the U.S. government after the chain said it was able to raise more capital.
CEO Randy Garutti and founder Danny Meyer said in a blog post Monday that the money could be better spent on independent restaurants, that in their words, "need it most (and) haven't gotten any assistance." The gesture makes Shake Shack the first major company to hand back money aimed at helping small firms ride out the impact of the health crisis.
Among the hardest hit by the pandemic were low-paid workers toiling in the restaurant, retail and hotel industries.
The combined sector got nearly a fifth of the $342 billion small business bailout fund.
The loans are aimed at helping firms keep paying their workers and their basic bills during the shutdowns.
But the recipients included a number of publicly traded companies like restaurant chains and hotel operators with thousands of employees and hundreds of millions of dollars in annual sales.
Shake Shack itself has closed about half of its 120 locations worldwide.
It has furloughed or laid off more than 1,000 employees after sales plummeted by more than a fourth in March.
The company managed to raise about $150 million in an equity offering last week.
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