Ruth’s Chris Steak House will return the $20 million coronavirus small-business loan it procured from the government’s $350 billion Paycheck Protection Program, the company announced Thursday.
The PPP was designed to throw a financial lifeline to the millions of small businesses who have seen revenues plunge due to social distancing lockdowns, but the hastily conceived program left thousands of applicants high and dry, after funds were snapped up in less than two weeks.
Ruth’s Hospitality Group, which owns the Ruth’s Chris Steak House brand, operates more than 100 steakhouses across the United States, Canada and Mexico. It managed to secure two $10 million loans, one for each of its subsidiaries.
With fewer than 500 employees at each location, the company argued that it does meet the eligibility requirements for the loan and has had to furlough some employees.
However, the chain has been under fire for accepting stimulus loans earmarked for struggling small businesses, not multimillion-dollar corporations.
Cheryl Henry, CEO of Ruth’s Hospitality Group said in a statement that the company was eligible for the funds it had applied for in order to protect employees and their families.
“We intended to repay this loan in adherence with government guidelines, but as we learned more about the funding limitations of the program and the unintended impact, we have decided to accelerate that repayment,” said Henry. “It is our hope that these funds are loaned to another company to protect their employees.
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