Small business owners need help sooner than these big companies but according to the Wall Street Journal [1] a major restaurant chain, Ruth’s Chris, received $20 million from the paycheck protection program just four days after the application window opened.
Ruth’s Hospitality Group [2] Inc., a company with more than 5,000 workers, received $20 million in forgivable loans on April 7, according to a securities filing. That is four days after the Small Business Administration opened the application window on its $350 billion Payroll Protection Program.
That fact, in and of itself isn’t necessarily a bad turn of events, after all franchisees are small businesses too but the larger issue is that once again, the big guys got a whole lot of money very quickly while the little guys are still waiting. Each day that passes without needed payroll capital, the tens of thousands of small businesses waiting on their banks will lose employees. As usual, a big government program has not provided the right prioritization procedures to get the funds to the smallest companies first.
Small business owners need help sooner than these big companies and they’re speaking out. Kyla Herbes published an open letter from small business [3] on her blog House of Hipsters April 16, and pointed out a few facts that will likely get by most of us:
First, the parent company for Ruth’s Chris is “the very same steakhouse that made $42 million in PROFITS last year and spent $41 million buying back stock and paying dividends to shareholders. If that $20 million loan had been given to save REAL small businesses using my round about math of $12,500 ($5,000 x 2.5) — that could have been 1,600 small business owners breathing a sigh of relief knowing they had a safety net.”
Even more shocking, Ms. Herbes reveals this little tawdry bit of information that reeks of the DC Swamp we all hate: “Mid-sized and large hotels and restaurants qualify for Payroll Protection Program funding because of a few special rules that were written into the CARES Act (Coronavirus Aid, Relief, and Economic Security Act) program. Industry lobbyists argued that hospitality businesses would be largely devastated by the shutdowns and shelter-in-place orders. BUT these hotels and restaurants are now asking to spend less of the PPP loan money on paying their workers and more on mortgage principals and franchise fees (as I stated above, PPP rules state that small businesses can use the loan only to pay interest on mortgages, NOT principal). Yup, these companies have twisted the Payroll Protection Program specifically created to help small businesses into a full-on corporate bailout.”
Many people rang the alarm bells on the CARES Act and even some congress members like Rep. Thomas Massie (R-KY) [4] stood up to be counted. But, he was thoroughly slammed, smeared, and primaried by GOP leadership, even by President Trump, simply for requesting an actual, recorded vote on the bill. Fortunately, now, and rightly so, the actual small business owners, many of them, are being left out in the cold while big companies with lobbyists get the help.
Looks like a third rate Grandstander named @RepThomasMassie [5], a Congressman from, unfortunately, a truly GREAT State, Kentucky, wants to vote against the new Save Our Workers Bill in Congress. He just wants the publicity. He can’t stop it, only delay, which is both dangerous……
— Donald J. Trump (@realDonaldTrump) March 27, 2020 [6]
…& costly. Workers & small businesses need money now in order to survive. Virus wasn’t their fault. It is “HELL” dealing with the Dems, had to give up some stupid things in order to get the “big picture” done. 90% GREAT! WIN BACK HOUSE, but throw Massie out of Republican Party!
— Donald J. Trump (@realDonaldTrump) March 27, 2020 [7]
And before you say this is an isolated concern, not so fast. Ms. Herbes wrote this in her April 16 letter:
“Before digging in on this today, I asked all my small business owner contacts if they themselves or anyone they knew had received PPP funding. Negative Ghost Rider — that’s a rough estimate of over 400 small business owners in the Chicagoland area who gave a resounding answer of, “NO, funding has not been received.”
Thankfully. small business owners work hard and do their homework.
Ms. Herbes is right to be “angry, worried, and sad” as she says. We should all be very angry about how we got here. Angry at the partisanship games played with the first bill, angry at the swamp game of not wanting legislators to go on the record, and most of all, angry at the situation that this government that caused the economic situation for these businesses is so inept, it can’t even make a program it created meet its own stated goal of saving small businesses, which create 80 percent of the jobs in this country. Now you folks in government get your damn act together, stop playing the partisan and swamp games, as President Trump has asked [8], and actually help the rest of us get this country back in business.