Two Companies Potbelly and Ruth’s Chris Steak House have decided to payback millions of dollars in loans that were meant for helping small businesses to survive during the pandemic. These are two publicly traded chain restraunts that are located across the country. Potbelly, as of the end of 2019, has 474 locations across 32 states in the United States. Ruth’s Chris was started as a small firm but now it owns more than 150 locations across the world, including Tokyo, Hong Kong and Aruba.
Recently, the funds for the Paycheck Protection Programme (PPP) ran out in about two weeks that led to a lot of small businesses striving to survive. This decision was made to give a hand to all those economic houses that are affected by it.
A $2 trillion Coronavirus Aid, Relief and Economic security Act or CARES Act was brought into action to support the small scale businesses,however, they also gave a green signal to the restraunts and hotels to apply for the loans provided that they had no more than 500 employees working at a single location. Under the same arrangement, Potbelly successfully secured a $10 million loan.
There was an Advisory warning issued by the Small Business Administration which stated that the money should be returned by the companies if they are not able to prove their eligibility for the loan. On the same day, Ruth’s Chris also said that they would return the $20 million loan it received. In an SEC filing on the tenth day of April that included the $10 million loan, the company announced the promotion of a top executive along with a $100,000 bonus.
However, the two chain restraunts are not the only big companies returning the loan. Shake Shack also announced earlier this week, that it too would return the loan to provide relief for its employees. Sweetgreen and Kura Sushi have also decided to return a $10 million and$6 million loan, respectively.