Nathan’s Famous returning $1.2M loan from emergency small-business fund
Nathan’s Famous said in a filing with the Securities and Exchange Commission that it will return a loan for over $1.2 million that the hot dog maker received under the Paycheck Protection Program (PPP).
It’s just the latest large company to return money after receiving a loan that was intended to go to small businesses. Shake Shack, Ruth’s Chris and the Los Angeles Lakers are among the other companies that have returned loans
Nathan’s Famous said it was granted the loan on April 21, according to the filing. The company explained that it applied for the funds before guidance from the federal government discouraged public companies from seeking the loans, CNBC reported.
“The company has determined to repay and return the entire amount of the PPP loan to the lender,” due to the guidance, Nathan’s said in the filing, saying it was granted a loan for $1,224,645.
The Trump administration last week advised large businesses with access to financial markets against applying for the emergency coronavirus relief loans created under the PPP. The Treasury Department in Thursday guidelines wrote that valuable, publicly traded companies cannot say in good faith that they qualify for the Small Business Administration loan program to prevent layoffs and bankruptcies.
Nathan’s said in the filing that the majority of its franchised operations have been temporarily closed “due to their locations in venues that are closed (such as shopping malls and movie theaters) or venues operating at significantly reduced traffic (such as airports and highway travel plazas).”
The company also predicted declines in sales from its other branded products and said only three of its four company-owned restaurants are open for take-out and delivery.
Three publicly traded hotel companies announced this week that they would not return a total of $69 million received through the PPP.
The program was created as part of the Coronavirus Aid, Relief and Economic Security Act. It initially included $349 billion intended for businesses with fewer than 500 employees. President Trump on Friday signed legislation including an additional $310 billion in funding for the PPP.