Small Business money going to corporations

A federal crisis fund of $350 billion established to keep small businesses afloat during the coronavirus pandemic ran out this week, leaving thousands of companies waiting desperately for help.

But several giant companies with hundreds of stores, thousands of employees, and whose executives make millions announced they'd received the maximum possible payouts under the small business program.

"Unfortunately, they were in line as soon as the window opened for this program and took a lot of resources away from those small business owners where this was their only option," Holly Wade, director of research with the National Federation of Independent Business (NFIB) lobby group, told BuzzFeed News.

Sandwich maker Potbelly and Ruth's Chris Steak House successfully obtained loans worth $10 million and $20 million, respectively, according to filings this week with the Securities and Exchange Commission (SEC). Taco Cabana, which has at least 164 stores across the country and is owned by parent company Fiesta Restaurant Group, also received a $10 million loan.

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Potbelly, Ruth's, and Fiesta Restaurant Group are publicly traded companies so their SEC filings were made public, but private companies do not have to disclose any loans.

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[T]he law provided some flexibility to restaurant and hotel groups by stating they could apply as long as they had no more than 500 workers at a single location.

  Buzzfeed

Who wrote that one?

News of the company's small business loans came as the small business fund ran out of money on Thursday, hitting its $350 billion limit after making more than a million loans.

Negotiations to extend it have stalled in Congress.

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Derek Martin, a spokesperson for the watchdog group Accountable.US, told Politico that "big Wall Street-backed restaurant chains that pay their executives super-sized bonuses" did not deserve to be first in line for payments.

"What a slap in the face to the untold thousands of legitimate small businesses that will not survive this crisis," he said, "many because they couldn’t get the help they were promised from the president soon enough, if at all.”

Shake Shack is returning a $10 million small-business loan it received as part of the federal coronavirus stimulus package, one of several companies that received the funds despite annual revenue of hundreds of millions of dollars.

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“The ‘PPP’ [Paycheck Protection Program] came with no user manual and it was extremely confusing. Both Shake Shack (a company with 189 restaurants in the U.S., employing nearly 8,000 team members) and Union Square Hospitality Group (with over 2,000 employees) arrived at a similar conclusion,” [two Shake Shack CEOs] wrote on LinkedIn. “The best chance of keeping our teams working, off the unemployment line and hiring back our furloughed and laid off employees, would be to apply now and hope things would be clarified in time.”

The two added that they did not know the federal funds for small businesses would be exhausted so quickly and have since secured separate funding.

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"We now know that the first phase of the PPP was underfunded, and many who need it most, haven't gotten any assistance," Meyer and Garutti wrote, calling on 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 two made numerous suggestions for improving the loan program, including adequate funding, assigning a local bank to each restaurant applying for the loan and doing away the June deadline for businesses to have their loans forgiven if they have brought back furloughed workers.

“This virus has moved in waves with a different timeline in different parts of our country,” they wrote. “Instead, make all PPP loans forgivable if an adequate number of employees are rehired by a minimum 6 months following the date that a restaurant’s state (or city) has permitted a full reopening to the public.”

  The Hill

UPDATE: And banks. Don't forget banks. Always banks.