Sweetgreen Will Return A $10 Million Small Business Loan It Received Amid The COVID-19 Outbreak
Sweetgreen announced Wednesday it would be returning a $10 million loan it had obtained through the Paycheck Protection Program (PPP), one which was designed to help small businesses navigate the COVID-19 outbreak. This was previously reported on by Business Insider.
The salad chain, which had 102 locations as of January, announced its decision in a Medium post this week from founders Jonathan Neman, Nicolas Jammet, and Nathaniel Ru. In the post, they said they found out they were approved for the loan from the Small Business Administration late last week, the same day news broke that the PPP been depleted of its $349 billion funding. Once they found that out, they said they "quickly made the decision to return the loan."
"Like all restaurants, sweetgreen’s revenue has been dramatically affected during this unprecedented time," the post read: "When we applied for the SBA loan, our goal was to use it as it was intended—to take care of our restaurant teams during this crisis. One hundred percent of the loan was going to be used to pay the people in our restaurants and hire back furloughed team members faster."
The chain is the latest to announce they were returning their PPP loan. Shake Shack confirmed it was returning its $10 million loan via an open letter from CEO Randy Garutti and founder Danny Meyer. They also criticized the PPP loan application process, calling it "extremely confusing." Chain Kura Sushi also announced it was returning a $6 million loan this week, according to Business Insider.
These larger brands have been roundly criticized for applying—and being approved—for these PPP loans, which were meant to help small businesses navigate financial difficulties amid social distancing measures that have closed many restaurants. They qualify because of the requirement that a business have less than 500 employees per location, something most restaurant chains would qualify for.
Ruth's Chris Steak House has been similarly criticized, even sparking an online petition asking it return $20 million in loans it received, but the chain has not publicly commented on the matter. The petition has more than 200,000 signatures as of this writing.
The Senate passed a bill this week that would add $310 billion in funds to the Paycheck Protection Program and it's expected to be approved by the House as well.
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