Amid public backlash that prompted several large companies including Shake Shack and Ruth’s Chris Steak House to return Small Business Administration (SBA) loans, three publicly traded hotel companies said they will not follow suit.
Ashford Inc., Ashford Hospitality Trust and Braemar Hotels & Resorts, all of which are tied to Texas hotel mogul Monty Bennett, said they will not return a total of $69 million received through the Paycheck Protection Program (PPP), The Associated Press reported.
“Media concerns over our receipt of PPP funds are misplaced. The PPP program was specifically designed to help companies like ours as part of the national objective of shoring up businesses and getting people back to work,” the companies said in a statement, adding that they will use the funds to protect jobs after furloughing or laying off 90 percent of their workforce due to the economic downturn.
The PPP program, created as part of the Coronavirus Aid, Relief and Economic Security Act, included $349 billion in funds intended for businesses with fewer than 500 employees. After the funds ran dry last week, numerous chain restaurants were found to have obtained loans by meeting the 500-employee threshold for individual locations.
Last Thursday, the same day the House approved an additional $310 billion, the SBA issued an advisory suggesting any companies that used such a loophole to obtain loans should return the money by May 7.
“It is unlikely that a public company with substantial market value and access to capital markets will be able to make the required certification in good faith, and such a company should be prepared to demonstrate to SBA, upon request, the basis for its certification,” the Treasury Department said in a statement.
“Any borrower that applied for a PPP loan prior to the issuance of this guidance and repays the loan in full by May 7, 2020 will be deemed by SBA to have made the required certification in good faith,” the guidelines stated.