As Bay Area small businesses wait on paycheck protection loans, some big chains receive federal funding
SAN FRANCISCO, Calif. - Many Bay Area small businesses, like others nationwide, are still waiting for emergency loans from the federal government's Paycheck Protection Program (PPP).
KTVU has received several emails from frustrated business owners only exacerbated by the news that more than 70 publicly traded companies including restaurant and hotel chains received funds before the money ran out last week.
April marked the 11th anniversary of Emi Tringali's dog-walking and pet-sitting company, "Sniff and Go." But, instead of celebrating, she's trying to stay afloat, forced to let 12 employees go because of COVID-19 shelter-in-place orders.
“It’s hard to plan for anything when it’s kind of a moving target," said Tringali. "At this point, my family, we’re living off savings.”
Like many small businesses, she applied for an emergency PPP loan through the Small Business Administration. She still has not received anything.
“It’s frustrating because you know when I see people that have profit margins in the millions of dollars and they’re asking for money, and I’m like we might not make it past two months," said Tringali.
The $349 billion program ran out of money last week and U.S. Securities and Exchange Commission filings show 71 publicly traded companies received loans, including burger chain Shake Shack.
Shake Shack says it has obtained new funding and will return a small-business loan it got to help weather the coronavirus crisis. The chain has laid off or furloughed hundreds of its employees and needed the assistance, its CEO Randy Garutti and its founder Danny Meyer said in a statement seen Monday.
But the company was able to get extra funding late last week through an “equity transaction” and decided to “immediately return" the $10 million paycheck protection loan it obtained through the CARES Act.
It said, “We’re fortunate to now have access to capital that others do not. Until every restaurant that needs it has had the same opportunity to receive assistance, we’re returning ours."
The letter said shutdowns due to the coronavirus pandemic threaten $800 billion in U.S. restaurant spending and are a severe challenge to both Shake Shack and to Meyer's Union Square Hospitality Group.
The loan program allows any business with 500 employees or less at a "single location" to apply. “We don’t have a problem with anybody getting some sort of support, said John Kabateck, the CA state director for small business advocacy group, NFIB. "But mom and pops, they need it today and they’re being shut out.”
NFIB is pushing lawmakers to add specific guidelines to ensure companies like "Sniff and Go" to get help. The Senate and White House say they are nearing a deal which includes an additional $310 billion for the program.
NFIB is calling for at least $400 billion more.
“At least half of that should be dedicated to those smallest businesses of 20 or fewer employees," said Kabateck. "That would actually be a good start to help get the pipeline going, that’s what we need today.”
The Associated Press contributed to this report.