After succumbing to public pressure, Chicago-based sandwich chain Potbelly said Saturday that it will return its $10 million loan from the Paycheck Protection Program intended for small businesses. The $350 billion total allotment ran dry earlier this month, stirring outrage against large-cap public companies who received the assistance.
The government allocated at least $243.4 million of the PPP loans to publicly traded companies, according to cnbc. However, the program was primarily designed to help small businesses with a market cap of $5 million to keep paying their employees.
Potbelly, which received the maximum loan amount, has a market cap of $71.2 million. The chain released this statement:
“Potbelly’s sales dropped dramatically when COVID-19 hit, forcing us to furlough employees, close shops, and significantly cut salaries at all levels of the organization. In order to financially support our in-shop employees, and based on SBA guidelines, we applied and qualified for assistance under the Payroll Protection Program (“PPP”).
We were surprised and disappointed when the fund was quickly exhausted, leaving many without help.
We are returning the PPP loan after further clarification from the Treasury Department. We will continue to seek alternatives to help support our employees and enable them to return to work so they can serve our loyal customers.
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Potbelly, which at first stated they would not return the loan money, now follows other large, public companies like Ruth’s Chris Steakhouse and Shake Shack, who have decided to return the government funds meant to help businesses survive the coronavirus pandemic.