As we all know by now the Paycheck Protection Program, $350 billion small business loan, is the part of the federal stimulus which is intended to provide capital to small businesses to pay employees salaries, utilities and rent.
Controversy arose when Shake Shake received $10 million dollars from the Paycheck Protection Program while the mom and pop stores got shut out when the $350 billion ran dry last week.
To be clear, Shake Shack legitimately qualified for the PPP thanks to an exemption written in for large restaurant and hotel chains, however for some folks the company does not seem like a small business and that it violated the spirit of the PPP.
The company announced that it received $150 million dollars of new capital through alternative means. In turn, they will be returning the $10 million PPP loan. Steven Mnuchin praised the company on Twitter.
In my opinion, Shake Shack and other large restaurant chains deserve the PPP money just as much as the mom and pops. It seems that the issue here is that the first round of PPP was significantly under funded and not surprisingly favors big business. Now Shake Shake has lost out on the (forgivable) $10 million loan due to its success, an odd turn of events.
Company Snapshot
Shake Shack started out in 2001 as a hot dog cart inside Madison Square Park which is in the Flat Iron district of NYC. The brand now has 190 locations inside the US. Below is a live webcam of the line, or where the line used to be, that locals use to gauge lunch time traffic at its first location in Madison Square Park.
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