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However a number of big firms with a whole bunch of shops, hundreds of staff and whose executives earn hundreds of thousands have introduced that they’ve obtained the utmost doable funds below the small enterprise program.
“Sadly, they lined up as quickly because the window opened for this program and took loads of assets from small enterprise house owners the place it was their solely possibility,” Holly Wade, director of analysis on the Nationwide Federation of unbiased enterprise (NFIB), advised BuzzFeed Information.
Sandwich maker Potbelly and Ruth’s Chris Steak Home have efficiently secured loans price $ 10 million and $ 20 million, respectively, in line with paperwork filed this week with the Securities and Change Fee (SEC). Taco Cabana, which has at the least 164 shops throughout the nation and is owned by dad or mum firm Fiesta Restaurant Group, additionally obtained a $ 10 million mortgage.
All loans got here from JP Morgan financial institution however might be backed by the US authorities as a part of the $ 2 trillion Coronavirus Support, Aid and Financial Safety Act, or the CARES Act. The legislation granted as much as $ 350 billion in loans to firms with 500 or fewer staff for payroll functions.
However the legislation gave restaurant and lodge teams some flexibility by saying they may apply so long as they did not have greater than 500 employees at a single website.
Beneath the Paycheck Safety Program (PPP), the federal government will cancel loans if the cash is used for payroll, hire or utilities – and employees should not made redundant.
Potbelly, Ruth’s and Fiesta Restaurant Group are publicly traded firms, so their SEC filings have been made public, however personal firms should not required to reveal loans.
Potbelly’s director of human assets, Matt Revord, advised BuzzFeed Information in an announcement, “Each penny might be used to financially help staff in our shops. Congress has particularly certified eating places for the PPP mortgage program as a result of restaurant employees are very important to our financial system. “
Within the identical submitting with the SEC who revealed his PPP mortgage, Potbelly introduced that he had promoted Steven W. Cirulis to CFO and Chief Technique Officer, paying him an annual wage of $ 425,000, which was quickly lowered by 25% because of the pandemic. Only for signing up, Cirulis obtained a bonus of $ 100,000 and might be eligible for a year-end bonus of as much as 60% of his base wage.
In 2018, Ruth’s Chris CEO and President Cheryl J. Henry’s complete compensation, together with salaries and inventory awards, was over $ 6,100,000. There’s greater than 150 Ruth’s Chris steakhouses within the USA.
A spokesperson for Ruth advised BuzzFeed Information the corporate took out the loans to supply extra money. “As a franchise group, it’s our accountability to our practically 30 small enterprise house owners, group members, prospects and shareholders to do every thing in our energy to make sure that Ruth’s Hospitality Group is nicely positioned for come out of this case right into a strong and viable entity ”. mentioned the spokesperson. “We are going to observe all tips set out by the [Small Business Administration] in how funds are leveraged, together with payroll insurance coverage for our group members in particular person areas managing our take out and supply operations. “
The information of the corporate’s small enterprise loans has come the small enterprise fund ran out of cash on Thursday, hitting its $ 350 billion restrict after granting greater than 1,000,000 loans.
Negotiations to increase it have stalled in Congress, however advocacy teams say extra must be finished to guard small companies.
Wade, the analysis director of the NFIB, mentioned that the conduct of enormous firms “went towards the spirit of the legislation”.
“They’ve traces of credit score and different loans obtainable and so they can work with their financial institution,” she mentioned.
The common NFIB firm, Wade mentioned, has simply 5 staff. “It was one of many only a few choices the place they may apply for monetary help,” she mentioned.
Derek Martin, a spokesperson for the Accountable.US watch group, mentioned Politico that “the big Wall Avenue-backed restaurant chains that pay their executives large bonuses” didn’t should be the primary when it got here to funds.
“What a slap within the face to the hundreds of legit small companies that will not survive this disaster,” he mentioned, “loads as a result of they could not get the promised assist from the president quickly sufficient, if in any respect. “
The NFIB says 90% of US small companies have been negatively affected by the coronavirus outbreak. NFIB President Brad Shut mentioned that “smaller firms [were] probably the most deprived. “
“Now we have heard our members, day-after-day, worry that the $ 349 billion mortgage program will run out earlier than help reaches them,” Shut mentioned in an announcement. declaration Wednesday. “At the moment their issues have turn into a actuality.”
A spokesperson for Taco Cabana mentioned they’d no additional remark past their submitting with the SEC.