Shake Shack returns $10 Million emergency loan to United States

According to CEO Randy Garutti and founder Danny Meyer, Shake Shack Inc (SHAK) will return all $10 Million it received from the U.S. government as a part of the Small Business Administration (SBA) loan on Tuesday.

The burger chain is the first major company to immediately return the budget handed by the government to aid businesses amid the virus outbreak.

Shake Shack shares dropped 3% to $42 on Monday and ran out of funding last week.

The U.S. government allotted $2.2 trillion budget for SBA to aid small businesses during the coronavirus crisis. The money can be used for the salary of employees and for the payment of their basic necessities during the lockdown so that they can recover as soon as possible. It appears that above 25% of the total $350 billion budget went to the least 2% of companies that gained relief from the government. It covers big firms with thousands of workers and earns millions of dollars yearly. It caused negative reactions from smaller establishments that were severely affected by the pandemic.

“If this act were written for small businesses, how is it possible that so many independent restaurants whose employees needed just as much help were unable to receive funding?” Garutti and Meyer posted in their blog.

The company also added that the budget it received can be given to other unsustainable restaurants “who need it most, (and) haven’t gotten any assistance.”

“I was glad to see that @shakeshack will be returning the #ppploan #CARESAct,” Steven Mnuchin, Secretary of the U.S. Treasury, said in a tweet on Monday.