The owner of the steakhouse chain Ruth’s Chris Steakhouse said Thursday that it would repay the $20 million in coronavirus funds it received in early April.
“We intended to repay this loan in adherence with government guidelines, but as we learned more about the funding limitations of the program and the unintended impact, we have decided to accelerate that repayment,” Ruth Hospitality Group chief Cheryl J. Henry said in a statement.
Shake Shack gave back the loaned funds, intended to help small businesses maintain their payrolls, after reports that some public companies had received the funds provoked a public backlash.
The Small Business Administration issued new guidelines on Thursday intended to discourage larger businesses from accessing the money. The guidelines say that it “unlikely that a public company with substantial market value and access to capital markets” would meet the criteria for the loan, particularly the need to show that a government-backed loan was necessary to support its ongoing business.
The Paycheck Protection Program quickly ran through the $349 billion Congress initially appropriated for the loans, prompting complaints that small businesses had been locked out while some larger companies got funding. The Senate this week approved a new round of funding for the program and the House is expected to vote in favor of it on Thursday evening.
“The intent of this money was not for big, public companies that have access to capital,” Treasury Secretary Steven Mnuchin said to reporters Thursday morning.
The Treasury Department said that any companies that return the funds before May 7 will be treated as though they acted “in good faith” in borrowing the money. Returned funds will become available for borrowing by other businesses.
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April 24, 2020 at 03:55AM
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