Sweetgreen returns $10 million PPP loan, but it may not be redistributed
TOP LINE
Sweetgreen, the $1.6 billion fast casual salad chain, said today it will repay the $10 million Paycheck Protection Program loan it received, citing small businesses and industry friends who “needed it most” and yet did not receive the money, but due to congressional policy, the money may not be reallocated in this manner.
WASHINGTON DC-OCTOBER 17 From left to right, Nic Jammet, Jonathan Neman and Nathaniel Ru are the … [+]
Marvin Joseph/The Washington Post via Getty Images
HIGHLIGHTS
“We learned that the money has run out and many small businesses and industry friends who need it the most have not received any funds,” said Sweetgreen co-founders Jonathan Neman, Nicolas Jammet and Nathaniel. Ru. Medium Publish. “Knowing this, we quickly made the decision to repay the loan.”
Sweetgreen is a fast-casual salad chain with more than 100 global outposts, a $1.6 billion valuation, and $350 million in venture capital funding.
The $349 billion stimulus package ran out on April 16, having reached bigger companies like Ruth’s Chris Steakhousebut has left many small businesses without the federal loan they need to pay rent, employees and mortgages.
Shake Shack announced on Monday that it was repaying its $10 million PPP loan for the same reason; Kura Sushi followed suit on Wednesday, announcing that it would repay a $6 million loan.
However, it seems that the repaid loan from Sweetgreen is not actually redistributed to small businesses: “The money will go back into the fund. However, new loans cannot be made from these funds until Congress authorizes new funds,” Jennifer Kelly, a spokeswoman for the Small Business Administration, told Forbes about Shake Shack. $10 million PPP loan similarly repaid.
The co-founders defended their decision to apply for the PPP, saying “Sweetgreen’s revenue has been significantly impacted during this unprecedented time…100% of the loan was going to be used to pay people in our restaurants and hire members faster.” of the team on leave”. .
A Sweetgreen representative said Forbes the Medium post contains all relevant information at this time.
Large number
$300 million. It was Sweetgreen’s 2019 revenue.
critical quote
“If this crisis has taught us anything, it’s that we’re all in this together and we strongly believe that the restaurant community needs more support and resources to weather this storm,” the co-founders of Sweetgreen on Medium.
Key Context
Businesses with fewer than 500 employees — and some businesses like restaurants and hotel chains with less than 500 employees per location — are eligible for PPP loans. Main financial institutions Bank of America, JPMorgan Chase, Wells Fargo and US Bank are prosecuted for allegedly prioritizing loans for large corporate applicants. And great candidates like Sweetgreen, Kura Sushi and Shake Shack (a publicly traded company) received multimillion-dollar loans, while mom-and-pop and independent contestants reported little or no help. On Tuesday, the Senate made available a new $310 billion in PPPs loans to replenish small business funds, of which $60 billion is earmarked for small businesses without existing banking relationships.
Further reading:
Senate passes $484 billion interim relief package. Here’s what’s inside and what’s missing (Forbes)
Shake Shack’s repaid $10 million PPP loan can’t be used to make new small business loans (Forbes)
Kura Sushi returns a $6 million paycheck protection loan. Will other restaurant chains follow? (Forbes)
Why we decided to repay our PPP loan (Medium)