Ruth's Chris will return $20 million small business loan
Ruth’s Chris Steak House will return the $20 million loan it secured through the federal government’s main relief program for small businesses battered by the coronavirus, the company said Thursday.
The $349 billion Paycheck Protection Program, part of the Coronavirus Aid, Relief, and Economic Security Act, was designed to infuse cash into small businesses with fewer than 500 employees. A loophole in the bill allowed large chains — including Ruth’s Hospitality Group, which operates more than 100 steakhouses across the U.S. — to apply for loans for each of its subsidiaries, despite having more than 5,000 employees and $468 million in revenue last year.
Ruth’s Chris joins other restaurant companies, including Shake Shack and Sweetgreen, in returning its multimillion dollar loan after facing backlash from the small business community. More than 260,000 people signed a Change.org petition demanding that the pricey steak joint return the loans earmarked for small businesses.
“In an effort to protect our team members and their loved ones, Ruth’s Hospitality Group applied for and received loans under the federal government’s Paycheck Protection Program. We were eligible for this assistance, and our goal was to utilize funds to keep as many of our team members working for as long as possible, cover 100% of health care benefits and position Ruth’s Chris to rebuild its workforce as quickly as possible,” the company said in a statement to CBS News.
“We intended to repay this loan in adherence with government guidelines. As we learned more about the funding limitations of the program and the unintended impact, we have decided to accelerate that repayment. We remain dedicated to protecting our hardworking team. It is our hope that these funds are loaned to another company to protect their employees, just as we intended,” Ruth’s Chris added.
The Paycheck program ran out of money last week, but lawmakers are expected to inject an additional $310 billion to fund more small business loans.
The Main Street Alliance, which advocates for small businesses, applauded the move, but called on the government to fix what it called “design flaws” in the program.
“While we are glad to see Ruth’s Chris returning the funding, it is not up to individual businesses to make good on issues with the Paycheck Protection Program,” said Sarah Crozier, a Main Street Alliance spokesperson. “The design flaws that allowed publicly traded companies and large businesses to take advantage of the program in the first place show how much lobby muscle these businesses have,” she added.
CBS News’ Kris Van Cleave contributed reporting.
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