As Shake Shack's weekend shack shaking may have reminded you, the COVID-19 stimulus package passed by Congress included the good-on-paper idea of a Paycheck Protection Program (PPP).
While the fund was touted as being intended for small businesses, Shake Shack and others that most certainly don't qualify as "small businesses" in the eye of the consumer gained millions in loans thanks to its existence, though Shake Shack met the resulting criticism by announcing it would be returning $10 million.
While shack shakers and company may be the most headline-friendly name, it's far from the only business taking advantage of funding (that's since been depleted) better served when going toward businesses that are truly struggling in a real way.
As GQ's Luke Darby and others reported on Monday, the writing of the PPP plan makes it so that the qualification for the funds applied to any business that doesn't employ more than 500 people at a single location. So it's no surprise that companies like Ruth's Chris, for example, were able to bag $20 million in relief despite boasting tens of millions in annual profits. The steakhouse chain made $468 million in revenue in 2019 and earned a $42 million profit.
Bloombergadds that Potbelly Corp got $10 million despite hundreds of millions in annual sales, the Pollo Tropical and Taco Cabana-owning Fiesta Restaurant Group got $10 million despite the same, and more than a dozen companies in comparable financial situations are said to have fared similarly.
More funding for PPP is expected to be announced soon, though the real problem here is clearly not the funding itself, but instead the qualifications for applying.
