- Accommodations and food service businesses landed more than $42 billion in funding from the Paycheck Protection Program, or 8.07% of total loans distributed, according to loan data released Monday by the Small Business Administration and Treasury Department reported by CNBC. The 660,000 companies named in the data only represent the largest loans, worth $150,000 or more, received under the program, according to The Wall Street Journal.
- TGI Fridays and Ruby Tuesday received loans between $5 and $10 million each, and O'Charley's and Five Guys received at least $5 million. P.F. Chang's, Famous Dave's, Chopt and MOD Pizza also received money from the federal program, according to an analysis of PPP data by Restaurant Business.
- About 50,000 restaurant companies received loans over $150,000, according to the Restaurant Business analysis. More than two-thirds of these PPP loans went to full-service restaurants, but in some cases restaurants were misidentified as full-service, the publication reports. Limited service restaurants landed 23% of these loans.
During the first round of PPP funding, major restaurant chains that secured multi-million dollar loans received swift backlash from critics, who argued that they were undermining the program's intended purpose to support small businesses amid the novel coronavirus crisis. These big companies were able to land federal funding because despite owning hundreds of units, their individual store locations employed fewer than 500 employees, which complied with PPP's requirements.
Shake Shack, Potbelly and Sweetgreen each returned $10 million in loans, and Ruth's Chris returned $20 million. Soon after, The Treasury Department issued guidance requesting that publicly traded companies repay their PPP loans because it is "unlikely that a public company with substantial market value and access to capital markets" would need federal support to survive the pandemic.
But as this PPP data shows, some big privately-owned chains were able to secure funding and fly under the radar of public scrutiny. And though these restaurant brands are not small businesses, the funding appears to have helped chains avoid furloughing or laying off staff, keeping restaurant workers contributing to the economy. Two hundred-plus-unit P.F. Chang's said, for example, that "as a direct result of receiving the PPP loan, we have been able to keep more than 12,000 team members on the job and most of our restaurants open throughout this crisis," according to The Wall Street Journal.
Still, the data shows that $528.83 billion lent through PPP so far has been distributed in allotments averaging less than $100,000 per loan, and the majority of loans lent to restaurants were granted to small operators, including franchisees of large brands like McDonald's, Subway and Hooters, according to Restaurant Business analysis.
The major brands named in this data pool could still face pushback for accepting and keeping their PPP loans, but the slowdown in applications and the remaining $130 billion in loan funds of the $660 billion program could soften such criticisms. The PPP application deadline has also been pushed to Aug. 8, which gives small restaurants yet to receive funding in Round 1 and 2 a chance to land support.
The National Restaurant Association was pleased with the results the data revealed, but is still pushing policymakers for additional restaurant-specific aid as coronavirus continues to disrupt the industry.
"The PPP has been a bridge for many during the shutdown, but the restaurant industry is still looking at months of starts and stops to find a new normal in business operations. We encourage Congress and the Administration to consider bipartisan options to support the industry’s recovery," Sean Kennedy, EVP for Public Affairs at the NRA, said in an emailed statement to Restaurant Dive.